I won't say that it's right or wrong but I wanted to share my thoughts on it.
The government is in power because they are the party who runs the country with rules as a supporting force in regulating all aspects.
I'm trying to interpret that the legal requirements you are referring to are about loopholes that are used for actions such as money laundering.
Because Bitcoin runs on its own rules with the intention of not harming the government, for me whatever rules they make will not make Bitcoin controlled. Regarding their success in taking advantage of crypto institutions and controlling crypto with their power, I think the fiat currency system should not be involved with Bitcoin which has its own system that does not take care of the fiat bank system.
A lot of people came to bitcoin because they were fed up with fiat world ruining their possibility and not making a fair ground for them, rich got richer and the system was built as a way to make you stay poor, at least the financial part of it, rich people who do not even need money, could get even bigger and bigger loans, because they are trusted to be able to pay back (odds shows huge companies are the ones who bankrupt and default on their loans a lot more often so banks are wrong) whereas a small business owner would not be able to get any loans at all.
This is why I believe that while whitepaper may or may not state something, "what" something is and how it is used are different things and this is why I believe that it is a special situation.