> We already have a system of checks and balances for this. If you borrow more money than you can pay back, you take a hit on your credit that can last years, and banks will trust you less in the future for your high-risk behavior.

There's no reason the banks cannot be proactive in assessing risk and protecting themselves from high-risk purchases. You can't buy poker chips or stocks with credit cards; a ban on buying crypto with credit is in line with this.