Let's say you ban cryptocurrency in the US. What happens? Bad actors now instruct their victims to get their BTC, XMR, etc from a p2p market, an offshore exchange, or from the black market. You got nothing but lost the ability to regulate domestic exchanges.

Ransomware doesn't magically disappears because your specific country decided to ban access to cryptocurrencies. Bad actors don't care where victims get their coins from as long as they are paid. Pushing exchanges and cryptocurrencies in general to the black market doesn't kill the system, that makes it just less visible and difficult to monitor and oversee.

Instead of this you can decide to keep exchanges around and heavily regulate them. From this point of view they are very important asset as they are the entry and exit points, you can easily define new regulatory rules, such as blacklisting addresses associated with coin mixers/tumblers and other shady tool, any address associated with criminal activity, etc.