AND have started the mechanisms to bring bitcoin transactions under these laws. It started (in the US) with the IRS taxing bitcoins as they would material wealth.
And why wouldn't they?
Well that's terrible and should be stopped.
Digital assets shouldn't be controlled by authority as long as you aren't converting it to fiat. Then, (while I still don't support it, I get it) I understand if IRS takes a portion when you convert it to USD. But that should be all about it.
Crypto "world" should have a separate line with fiat world and fiat-controlling authorities shouldn't have any power there as long as someone doesn't convert their crypto to fiat.
Why should it? If crypto became popular there wouldn't be tax revenue
There's no technical reason fiat money doesn't have this property. But societies everywhere, democratic or authoritarian, have decided that's a bad idea and have money laundering laws.