The government is sure that bitcoin or crypto is being used for illegal purposes that is why they are so keen on preventing it from spreading more and more people using cryptocurrencies. It’s a sloppy excuse because the real reason why they do not like crypto is because it is a threat to fiat. They lose control over the money and they lose control over the economy.
The reason for misuse for illegal activities such as money laundering isn't a reasonable reason, because illegal activities are not only in crypto, FIAT also experiences the same thing. That's the reason the Bitcoin community is getting stronger day by day because they're aware of all the unreasonableness made by the government. And yes, they're just afraid of losing control over what they should be able to control.