And it would be trivial to convict on this - they deposited huge sums into exchanges, traded them for another currency, then double spent the deposit
It's just theft
But who is selling anything for Eth?
> Acknowledging this as "theft" kind of undermines their agenda to kill off alternative currency.
Whose agenda?
Governments generally have no interest in alternate currency systems that are not under their control, taking off. So far, crypto currency has been flying under the radar and the ones that have broad support from financial institutions go against the very idea of Bitcoin and Etherum, i.e. they are not providing much of the benefit that supporters of crypto currencies are interested in.
Total Coinbase fees already went over Intercontinental Exchange fees in the last cryptocurrency bubble (because of the large margins).
I imagine if such a case ever goes to court its going to be very interesting, because for the government, this should be like being stuck between a rock and a hard place. Acknowledging this as "theft" kindof undermines their agenda to kill off alternative currency.
There is also another dimension to it. "Double spending" conceptually seems very similar to the government printing money, devaluing the dollar.