There should be no regulation of crypto at all.

When used as a currency, regulated crypto has fewer benefits than fiat money, so regulated crypto won't gain wide adoption for buying/selling products/services.

On the other hand when traded on the stock markets, regulated crypto is pretty much the same as the regular stocks.

In a nutshell, regulating the cryptocurrencies will turn them into yet other market tickers that are only meaningful on the stock markets, but barely anyone uses them outside of these stock markets.