1) Short markets in Bitcoin don't have unlimited depth, and the centralized ones are KYC'd so there's some risk there 2) What if it doesn't tank the price? One thing people have suggested is just burning all the vulnerable coins[1]; it reduces supply so maybe the price will... go up? The point is there's uncertainty.
It will also tank the price because by doing it, you have demonstrated you have complete control of bitcoin transfers, you can transfer bitcoins from anywhere to anywhere else at any time, and that there is no way to flag it as illegitimate because mathematically you're just providing the correct numbers.
> the legal tender of the United States or of any foreign country, or any counterfeit thereof
Bitcoin has, at times, met this standard by being the legal tender of a foreign country.
Something doesn’t have to be money to be involved in money laundering, obviously.
In fact, the U.S. has prosecuted and convicted people for money laundering simply for operating the bitcoin mixing service, which is clearly just bitcoins in and bitcoins out.
Every participant knows and accepts it the moment they pull a random key and start operating the corresponding wallet.
If all of them went to "solved" at once or in short order I believe that would cause sufficient panic without worry of stealing or burning.
I'd drain as much wealth from the network without being detected instead of going guns blazing.
Like publicly destroying ivory /poppy stockpiles while simultaneously holding puts/futures on correlating pharmaceutical financial instruments.