Not "all" of the exchanges - I think the key is the term "significant markets". You need to have most people who do significant amounts of BTC transactions on regulated exchanges as opposed to everyone.

> You'd need to force all the unregulated exchanges to close down

No, you'd just need for the regulated exchanges to control a substantial share of the total volume of trade, which could happen by shift in trader preferences, unregulated exchanges becoming regulated, or, yes, unregulated exchanges shutting down.

That doesn't sound right. The etf is pinned to a single exchange (which they complained wasn't liquid enough) and there are thousands of informal unregulated gold markets all around the world.

> and block ability to run smart contracts or any other software on it.

How do you think smart contacts play a role?