It seems to me that regulation and crypto industry is impossible. I am fully confident that the government will not be able to affect the quality of some projects.
They will surely try but it is going to be a real challenge for them to try to regulate something that was specifically designed so they could not regulate it and when you add that many of the people that are in cryptocurrencies are doing it so they can be free of government control then you have a series of problems that will be very difficult to overcome for any government around the world.
The regulation need to be made by the project's own countries government. See how almost all of the ICO comply with the AML and that's how you force a regulation to many projects.
The project devs will also always taking things into consideration when it comes to regulation since their project could easily gone into dust when they caught.