To me, the concern here is that it creates an argument for all forms of crypto including DAO's to be fully regulated. Of course, it instantly creates issues around who regulates what and where (does the FTC have authority in the UK, EU, Africa, China ?). It also carries with it the implication that full KYC will be required for everything crypto-related.
All this destroys the whole point of crypto; it would just fold it neatly into the controlled and manipulated legacy finance system. Exactly what the legacy financiers want, of course.
So perhaps the answer is for people brighter than me in crypto to come up with ways for crypto to self-regulate that genuinely work without breaking anonymity. Then publicise them heavily. If there are ways to write contracts and structure DAO's that genuinely protects ordinary investors and users, I'd like to think we could create them. It could break crypto free of the dubious reputation that it has gained and lead to true mass adoption.
@alonicus That regulatory boundary problem is the part that doesn't get enough attention. The moment you regulate DAOs as "cryptocurrency," you hit the jurisdictional maze — a DAO with French devs, Cayman treasury, and US users doesn't fit any existing regulatory box. The ban creates precedent for targeting individuals without solving the structural question of who regulates a protocol with no headquarters. Which means the next enforcement action will face the same ambiguity, just with a different name on the order.