Entrapment has been and always will be a common tactic amongst law enforcement in America.
If they know people wan't prostitutes they will set up fake prostitution stings , if they know people want drugs they will have undercovers selling drugs, if they know people want to launder their illegally gained funds they will set up sting ops that would attract those type of people.
I don't think this is an attack on bitcoin so much, just another example of police going undercover and offering illegal things/services and then see who bites.
What "illegal things" were offered by the undercover lawn enforcement orificer to the bitcoin seller? It was just an exchange of bitcoin for dollars. It's clearly just another case of flat out persecution. The only criminals here are the costumed thugs who kidnapped these men at gunpoint and locked them in cages for absolutely no justifiable reason. Those men harmed no one. There is no victim here. There is no loss and no injury and no fraud. Therefore, there is no crime.