I don't even necessarily think a 'war on crypto' is needed. The problem is that crypto seems to function as a get out of jail free card for very straightforward financial crimes: you just do the financial crime, but apply a thin veneer of 'but with crypto' and the legal system is utterly bamboozled.

Crypto's problem is that when the law is updated to deal with these stunts, it's suddenly just a crappy version of the existing financial system.

The war on drugs creates almost all the negative externalities of drugs to try and stop people making their own choices.

It is both a reason not to buy drugs now (you're sponsoring all that other stuff) and a reason it's a ridiculous and immoral policy.

It is also on no way comparable to crypto.

I'm not sure you understand the point. It isn't that CZ himself was specifically putting forth the effort to launder money. It isn't that he was specifically doing things to try and make it easier. The point is that he had a legal duty to actively attempt to prevent money laundering. Binance was legally required to do this to operate in the US, and did not. The court case produced messages from the Chief Compliance Officer pointing out a myriad of ways in which they were not complying with various laws of this nature and they were ignored.

The BSA is not a technicality and trying to reframe it as one is wild. It is to make sure that people that have a financial incentive to turn a blind eye to money laundering don't turn a blind eye to it. You don't need to be directly involved in the money laundering to be incentivized to let it happen.