The criminals that want to stay hidden will continue to do so because you will always find open source projects that provides encryption.
Similarly in most places you already cannot be an ISP or VPN provider without following some reporting requirements. And there's no simple way for criminals to get mainstream quality networking services that don't follow regulations.
I don't agree with the ban, but I do think it would certainly hurt many classes criminals. I'd say it's generally a pretty bad strategy to oppose such policies by denying the supposed effect on criminals. All kinds of freedoms benefit some criminals.
E2EE messaging that required coordination was already possible for decades and the governments didn't mind that as much.
Users that send too many encrypted blobs can simply be banned by platforms as suspicious (and I wouldn't be surprised if that's happening already). Exchanging files is easiest to detect by centralized platforms and hardest to do efficiently with good delivery assurances in reasonably anonymous decentralized systems.