It's reverse in my opinion. Tokens used for illegal stuff at first get into the finance sector if there is no oversight, e.g. banks start holding them, exchanges use them etc. Then when the government asleep at the wheel (or complicit) finally awakens it is too late to ban them as it was required by law in the first place and they are deemed "too big to fail". That's why even under Dems SEC was afraid to classify BTC and ETH as illegal securities and went only after smaller fish (an even that has failed).
If oversight was real and SEC investigated tokens earlier, they would have outlaw them way back then (translation - would have made all tokenbros comply with laws, thus rendering whole scheme worthless) and tokens wouldn't entrench as deep as they are now.
If oversight was real and SEC investigated tokens earlier, they would have outlaw them way back then (translation - would have made all tokenbros comply with laws, thus rendering whole scheme worthless) and tokens wouldn't entrench as deep as they are now.