They could try a few different ways, none will work in the end. Satoshi was kinda smart

How could it be implemented when this bill or similar one eventually passes? Financial institutions Banks, LSPs, mining pools, independent miners, exchanges, custodians,... fully KYC, KYB, AML compliant. Bitcoin Network Settlement network for financial institutions. Individuals and businesses have accounts with those financial institutions. Lightning network Payment network for businesses and individuals. Requires registration for individuals and businesses with a financial institution to gain access to the network. Lighting channels Legal channels are all owned and operated by financial institutions. Lighting payments All payments are compliant as they are processed and settled by financial institutions. Miners Purchases and sells of miners require KYC/KYB. Pool operators have to KYC/KYB hashers. Nodes If you are not a financial institution, you don't need a node. Financial institutions use their compliant nodes for their customers' transactions. Only people involved with illicit transactions need nodes. Opting out P2P will still exist, black market will emerge and the rest of the world will transact with US Bitcoiners, especially in jurisdictions where it's legal. After all, over 50 years of war on drugs hasn't stop the industry. Foreign financial institutions Reporting requirements on US customers will be extended to Bitcoin. Enforcement Enforcement doesn't have to be perfect to have a chilling effect. New laws and regulations will be added overtime to improve control. And for those who get caught, it will be a painful experience (asset confiscations, fines, jail time). Impact on crime The net positive will be an increase in activities dreamed criminal by the government. So crime will go up, and more means will be needed to combat those new criminals and jails to hodl them. Why would the government pursue compliance and traceability of all financial transactions except for Bitcoin transactions?