An AML regime is the first step towards effective regulation of intermediaries.
Most governments use this clause to control their citizens. Yes, everyone is against money laundering, but this does not mean confiscating the freedom of all people.
The government will not be able to prevent people from using Crypto in any way, the use of such strict laws is what prompts people to always find ways to overcome this ban or circumvent these strict laws.
Such things are rare in countries with more open crypto regulation.