Government has a right to regulate in order to deal with negative externalities and the negative externalities from Bitcoin and other crypto are extremely large. Most of crypto has been various type of financial schemes and regulators should ensure at a minimum that all investors in such schemes were properly accredited and impose regulation if the tokens were historically taking unaccredited investment. The government also has the right to regulate polluters and even an outright ban is reasonable if they conclude that the environmental cost of proof of work vastly outweighs the very limited use cases and benefits that have been shown to date. Finally, and I think the strongest argument is the government is allowed to regulate financial transactions. Bitcoin and other crypto intentionally circumvent this by removing the party conducting the financial transaction. Government could conclude this is unreasonable resulting in a ban or could create reporting requirements for any cryptocurrency transaction, subjecting one or both end users to requirements currently dealt with by banks. The idea that crypto-proponents seem to have is that removing the bank should remove all reporting requirements on transactions and I don’t see a reason for that to be true. I think in aggregate there is a fairly reasonable case for a ban across multiple substantial issues. And no, the government does not owe people for the price consequences of its regulatory policy. Investors in casinos are not made whole for changes in gambling laws.