he was converting to FIAT, so serves him right for ignoring FIAT rules. if he converted bitcoin to litecoin, no one would have touched him. 

I don't know that it "serves him right," but he would have definitely been better off staying in crypto currency.

I am sad to say you hit the nail on the head. The only thing worse than a nanny state is a population that gets comfortable with it.

Almost certainly trolls. Bitcoin doesnt need regulation, but some will inevitably come.

the three that voted yes, probably do not know the difference between regulation, and consumer protection. they probably want consumer protection but think its all the same thing. when in fact is it not

Privacy != Anonymity. Privacy needs protection. Anonymity needs regulation.

You can't spend a million dollars worth of anonymous gift cards in any practical way, so you shouldn't be able to easily spend millions worth of bitcoins anonymously. I'm not saying it can be made impossible, but there should be regulations restricting the use of mixing. If that isn't done, then the law of unintended consequences will slap the Bitcoin community hard. Folks may really believe that anonymity yields more freedom, but the road to Hell is paved with good intentions.

Except for the USG of course 

You keep saying that, but it still doesn't make it true. Show evidence to support that statement and show that evidence to falsify that statement are fallacious.

Ultimately what we have with bitcoin is the blockchain protocol.  

It means that whatever rules we all agree to (at least about things that can be checked via the blockchain) can be enforced by the laws of mathematics.  No temporal authority is required to prevent violations of those rules.

But there is a difference in kind between that clean, simplistic mathematical universe and the physical and contextual universe that everybody actually lives in.  

Banks etc. exist in a world of temporal security.  The mechanisms that (mostly and most of the time) prevent them from stealing their customers' money are all about laws and licensing and legal conformance and barriers to entry and professional accounting practices and, yes, courts and fines and possibly even jail time.  

Both of these models are limited.  But for particular subsets of applications, both work.  So far the biggest problem is that the handoffs between them have been abysmally bad.

It's the brokerages and exchanges and banks, err, excuse me I mean online wallets - people who handle other people's bitcoin - who have been the biggest stealers of it.  At some point it comes out of that mathematical-security world because someone is holding bitcoin on behalf of someone else.  And that is where it gets stolen, so far because it's not going from there into an environment with a solid framework of temporal security.  

So we need to figure this out.  Either we need businesses at the endpoints (meaning brokerages and exchanges) that are fully a part of that regulatory framework, or we need to extend the mathematical security model until those businesses have nothing left to do and can be done without.