I think it is a mistake to equate the many hoops around regulations as “security,” when I know multiple people who tried to get regulatory approval, and ended up having to refuse because it would have deliberately *weakened* their actual security to follow their requirements.

For the regulations to make sense from a bitcoin keys perspective, it has to understand them. I find it extremely unlikely that they do.

There are likely areas where some of it still applies, mainly in basic computer access, user controls, and possibly physical separation. But the idea that this properly translates to the bitcoin environment and doesn’t either leave them vulnerable to accidental data loss (because you can always “roll back” in fiat) or exposure of keys in a different way (because authority overrides mistakes in fiat) I think would likely be naive.

If you want to argue that regulations work and that incentives are aligned, I’d probably just point to the AAA ratings for MBS’s immediately prior to the worst housing collapse in this countries history.

“Corrupt” or “incompetent” I think are far more broadly accurate terms when it comes to describing our regulatory systems. 

 The only thing they want to secure is their authority over the citizenship.