This is the entire point of regulation. When there is information asymmetry (a natural phenomenon of these Bitcoin exchanges) honest agents are always disadvantaged compared to dishonest agents. There is very little the honest agent can do to prove their honesty that the dishonest agent can't simply lie about. That will eventually chase out a lot of the honest agents who are selling high quality and therefore pricey products. In the end you are left with a market flooded with both dishonest agents and low quality products. The idea of regulation is to combat this information asymmetry and ensure that even the bottom of the market qualititywise is not below some acceptable standard.
This is actually a great assessment of many industries. I watched this exact thing happen in the lead generation business from 2000 and continue to today. It's grown impossible to be honest, as no one trusts you anyways and it becomes difficult to compete on price. Even when you give them everything they ask for, they still don't buy because they have learned not to trust lead generators, Bitcoin marketplaces, etc.
