It's been 13 years since the first cryptocurrency was created and the idea of regulating cryptos is still one of the most controversial topics in the crypto world. One major reason why many don't agree with regulating cryptocurencies by authorities is that it could kill the innovative mode and growth of cryptocurrencies and could put the entire market under the control of the government or those in power which is infact against the reason why they were created in the first place.
Regulations by the government could do alot of harm to the crypto space and looking at the situation of cryptocurrencies in my country, I sometimes feel we don't need the authorities in this space, they've caused alot of harm already...but then, we may need some form of regulations or policies to allow the crypto space become safer and to get the best experiences from the technology.
The most important reason why I think regulations may favor the cryptocurrency industry is that they would allow everyone operate in a safe space free from successful theft, hacks and scams. For instance, the the recent New York City Bill on Rug Pulls which made the act illegal and now reduces the risk of investing in cryptos while giving assurance and safety to investors. Other forms of regulations like KYC could also help centralised exchanges monitor the movement of funds and help stop illegal trades and transactions.
Another important reason why I feel we need regulations is that it could lead to stability and mainstream adoption of cryptocurrencies because with regulations, many companies and firms would gain some trust in the industry and it's stability. The crypto industry is well known for its volatility and that's one major why most companies shy away from it. Cryptos are regarded as risky assets and so regulations may change that.
In general, I think regulations would allow the cryptocurrency industry be a safe space. It would mostly protect investors and boost the confidence in the industry. The issue however is when authorities may want to assert too much regulations and control (they sometimes don't know when to stop). Like I said earlier, I'm actually fine with how authorities really can't do much to control cryptos which is a good thing, but we may need some form of regulations due to the nature of cryptos and how they can be exploited by bad actors in the industry.