There should be a law that currencies are used for legitimate payments for more than X% and otherwise the currencies should be marked as gambling money. How to measure? I don't know, but I'm sure the IRS can come up with something.
To the extent that Tether is anywhere, it's in notorious financial law evasion island Grand Cayman.
It's already illegal to supply overseas gambling services to Americans (Pokerstars). Quite a lot of the crypto world would arguably be ruled illegal under existing law if it was prosecuted before an American court - or a British one, or many other jurisdictions. It's just that there's so much of it, it moves so fast, and has enough legitimate-looking political cover that it's escaped so far.
It’s not illegal to play Pokerstars in America. Its a states rights issue. Some states allow it and some don’t and the ones that don’t could allow it using their various mechanisms for changing the laws (like California’s props or Florida’s citizen ballots) if they wanted to but they don’t. Probably a strong correlation between lottery revenue and online poker being illegal but that’s just a theory without facts backing it.
I think a ban can work quite well as a deterrent. If ThePiratebay/PopcornTime was not illegal, we wouldn't have Netflix&co.
It's not perfect, but I think a ban can be very effective.
Also, I'm tired of hearing cryptocurrency-related stories at social events and in podcasts. If it were illegal, I believe people would be more reluctant in spreading these stories.
