I'm sure all governments would love to see cryptocurrencies fully regulated. In my opinion, however, it is not possible. Blockchain technology offers too many opportunities to remain anonymous. I think it is only up to cryptocurrency users whether they want to use services in which they have to undergo KYC verification, or simply choose an anonymous service.
In my opinion, cryptocurrencies will never become fully regulated.
For example, in addition to Bitcoin and Ethereum, there is an anonymous and confidential cryptocurrency Monero (XMR). There is also a technology for exchanging one cryptocurrency for another without the mediation of cryptocurrency exchanges (atomic swap technology).
Strengthening state regulation of the crypto industry inevitably leads to the development of new anonymity and confidentiality technologies.
There is a good proverb - "Money loves silence."
Financiers around the world need a crypto offshore, so anonymous coins and other technologies that provide anonymity and privacy will always be.