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.
I can’t agree less with you, bitcoin to me has just been made a scapegoat by the government or let’s just simply say they are using the money laundering scheme to fund the excuse of not legalizing it. If we look at almost everything that we associate as decentralized the government usually just throws in the money laundering stuff just to demarket it. The money laundering issue yes I know will be on decentralized platforms as criminals always look for means to actually cover their tracks but bitcoin transactions are ultimately stored on public blockchain, but even then has the money laundering problem associated with even fiat currency be tackled? No, so seriously I see this just way to halt the spread of bitcoin or cryptocurrency, and if the government doesn’t stop and accept that it is here to be a better alternative then the adoption although will continue to grow will be slowed a bit