Turns out that when you purposefully build a system without any guardrails or oversight, then bad actors will find exploits and there will be no way to stop them. Regulation and oversight might be good things, actually.
The "exploits" you're describing were possible 20 years ago through various other methods (unregulated banking, cash in briefcases, etc). The new thing is government and police having a much greater degree of control over monetary systems.
I think crypto is failing at most of its promises and it's still unclear whether it will ever live up to any of them. But rah-rah celebration of government being able to monitor and halt anything it wants to is not the way to go, either; it's actually a literal doomsday scenario (Vernor Vinge has written about this, among others).