The sentiment is understandable but I think the hands-off approach has pretty clearly failed: ordinary retail investors are in fact plowing funds into crypto as investments (I went to grade school with several of them, who post constantly about this stuff on Facebook). In the status quo, nothing keeps a company like FTX from plastering Tom Brady and Gisele Bundchen all over Chicago, positioning itself as a real alternative to Fidelity or Schwab.

Regulation doesn't have to mean legitimation. It can mean the opposite thing: ban public promotion of crypto assets, the same way we do with hedge funds and other qualified investments. Forbid FDIC-regulated institutions from accepting crypto as collateral. The contagion seems easy to stop.