It's basically if you've ever read about MMM[1] and thought: Why didn't the government do anything? That's the kind of thought process they are likely in.

Of course in my opinion Madoff & MMM are fundamentally different than cryptocurrencies[2] because there isn't someone at the top who can hide what is happening or issue new coins. Arguably what is happening with Tether might be similar, but that's a very specific thing that you try to target with government intervention instead of blanket banning.

[1]: https://en.wikipedia.org/wiki/MMM_(Ponzi_scheme_company)

[2]: to be clear there are ponzi/madoff schemes in crypto, plenty actually, but if you weight by retail exposure to them they are not that common