I don't believe it's any worse than multisig. Regulators could demand exchanges only output to addresses encumbered by a multisig that includes a government controlled pubkey.
I've heard things like this said before, and while its true governments could already do this (and don't seem to be interested), it kind of brushes off the fact that CTV will make things like this easier (which will make it more appealing to do).
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That said, I'm not against CTV. It allows you to do cool stuff. It's simple and powerful. It just empowers everyone.
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