Unfortunately, where there's a potential to earn money, fraud will always follow. This is the whole reason we have regulations in financial markets to begin with. But regulations don't have to be something that impedes business either. Its definitely more than possible to enact rules of engagement in business, without harming the abilities to conduct business.
The problem is, government agencies like the SEC have long had a bad habit of enacting more regulations while providing very little oversight to ensure businesses are acting within the best interests of the public.
Regulations should be more geared towards oversight and ensuring business entities are playing by the rules, rather than putting up red tape that hampers the open markets.
For instance, Bernie Madoff perpetrated his investment scams for decades because of lax oversight by the SEC and others who never bothered to scrutinize his business practices. In this case it wasn't a lack of regulations that was the issue, it was the lack of oversight.
I think this is part of the reason the SEC has tread so lightly on the cryptocurrency market until more recently, they don't want to impede on the public's ability to conduct business, that would be bad for our economy regardless of the currency involved.
It appears the SEC isn't so much looking to heavily regulate the crypto markets either, they just want the ability to have oversight to help ensure fraud doesn't get out of hand, and they want investors to have confidence int he investment choices they make.
If there's any real threat to the future of crypto it isn't from the U.S. government or the SEC, but rather from commercial banks and payment processors. Bank of America recently issued a statement stating its concerns for the rise of cryptocurrencies and how they feel it may negatively impact their business. Likewise, Poland's central bank recently launched a smearing campaign on crypto, even going as far as to enlist the help of well known Polish personalities on YouTube to help pull it off.
Banks are the ones who want to stamp crypto out! The biggest threat to crypto at present though, likely has to do with the failures of integration in payment processing. This is why Visa and Mastercard are holding off so heavily from allowing the further integration of crypto with their financial systems. That's a whole other story though.