Actually I don't like to say that the government has the power to do anything, but that's the truth. Although actually you can think that it is not accurate, but I think the government managed to prevent a lot of things with regulation even if the percentage is not at 100%.

Regarding the regulation of bitcoin that should not be used as a legal tender, users can still circumvent it. The government won't know who and where the money came from if these people are smart enough to hide their bitcoin transactions and history. Transactions that occur between wallet X to wallet Y may not be known for what purpose if bitcoin has been through the mixing process. so I think it's true that regulation can't prevent people from sticking to the rules but it might be the reason why someone gets punished.