Gov: “Here is our wallet blacklist feed. If you transact with these wallets, you go to jail.”
On the plus side, FinCEN can automate currency transaction report generation and monitoring on a public distributed ledger.
Me: "I'm already in Africa, find me, losers"
"No thanks. We're in America and have $20M of assets and 50 employees and we'd rather not lose it all and go to jail."
You should read about US sanctions, that's actually pretty close to the truth. Living outside of US jurisdiction means... living in Russia, AFAIK.
You can make it illegal to use Bitcoin, but it was designed to make it practically impossible to enforce such a ban.
"If you transact with these blacklisted wallets, your wallet also automatically becomes blacklisted, and if we find you then you go to jail. As an exception - if you receive any amount of BTC from a blacklisted walled, you have 7 days to send the same amount (or greater) to [this government wallet] and that will erase all your legal liability and make your wallet whitelisted again. We can even automate the process for you if you trust us enough to give us your wallet keys. Alternatively, register email/phone numbers with us and we'll notify you when your wallet is blacklisted, and tell you how much BTC you should pay us"
> We can even automate the process for you if you trust us enough to give us your wallet keys.
Haha seriously? Your solution is that people give their private keys to the government? You must have no experience with crypto or what it's about it all. Nor really experience with how the government works and how often it gets corrupt. A corrupt clerk now is a small nuissance, a corrupt clerk in your proposed scenario means that thousands of addresses get stolen of all of their tokens. There is zero chance that this scenario will ever be implemented in any meaningful way.