As a libertarian, I definitely don't want the government able to track my transactions as I'm doing them. But as a citizen, I'm obligated to pay my taxes. If my cryptocurrency balances are accessed via a smart contract I agree to when I sign up[ on a cryptocurrency exchange to enable my account/encrypted key to be charged an automatic fee by the country where the IP address is located for the capital gain according to the tax code of the country upon a sale/withdrawal of the currency - this capital gains tax calculated as the difference in fiat value as of the date of purchase and the date of sale and the current tax rate on capital gains, my taxes are paid and my transactions remain anonymous.
Every country is entitled to tax its citizens. If I'm a criminal (money launderer), then it makes sense for law enforcement within my country to discover that and prosecute me. That is a separate issue from tax evasion. Conflating the tax evasion with other kinds of crimes is misguided. If South Korea wants to prevent people from trading, that is simply reflection of the desire for over-control of citizens by the existing political establishment. They can do it, just as any anal country can regulate free enterprise within its borders - stupid thing to do - but politicians can be voted out and idiots removed from office. That is not an inherent problem for cryptocurrencies, but for political jurisdictions. 
Bitcoin is dying and its dragging the entire market down with it. The markets are literally joined at the hip with BTC, and when BTC falls because people have realized how slow and unreliable it is, the larger market ( the new money, people who have been in the game for less than 5 months) panics as they believe that bitcoin IS the market, and if bitcoin fails, then everything else does. This is part of the issue when people like Warren Buffett go on record saying that "Bitcoin is a bubble and will burst" That part is true, for the most part, not many people are willing to pay $36 for a transaction, especially one that takes an hour or more to confirm, and even more so when the developers make little attempt to fix the BTC network -
But when everyday people hear things like this is causes a massive amount of irrational fear...coupled with news from South Korea which was false, as well as news from traditional outlets that claim the market and Bitcoin are constantly dying. We risk going into a free fall in prices within the next few weeks if people don't stop spreading false information. The market dropped by 30% just on false news and an assumption that Korea MIGHT POSSIBLY COULD BE MAYBE be banned from the markets. What would happen if over a 3 day period Fox News and CNN falsely reported that "Bitcoin" was going to be banned in the US, without any proper sources to back it up? The market would implode all based on a rumour. This is why its VERY important to not follow false channels, or people looking to hype coins, its causing the market to expand in a direction that it shouldnt be going, which is the hype, pump, dump and the market is burning scenarios. This has a lasting effect on the human mind, and we'll pay for it eventually.