Well I think there is two sides to it. First the government want investors and users assets to be save via this regulation looking at the past events of some crypto exchanges that went bankrupt and collapsed with users funds. On the other side, the government are kind of insecure that people may on the long run not rely or depend on the local fiat currency which is one reason they are looking to regulate the industry. Regulations won't have been necessary if some exchanges hadn't scammed their users in the past.
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