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.
I'll add my five cents.
Cryptocurrency is not regulated in any way right now, as far as the ideas that Satoshi was talking about.
For example, no regulator can prohibit you from sending or receiving bitcoins, paying for goods and services with bitcoins, and so on.
If you don't use custodial services, you can't get regulated and restricted. Castorial services are regulated in each country