You can’t ban a cryptocurrency. You can only ban it’s exchange in regulated exchanges. Cryptos that are banned in regulated exchanges will be traded by non-regulated exchanges. When a person wishes to convert their privacy focused crypto to fiat, they will use a non-regulated exchange to convert to bitcoin/litecoin, send that non-privacy focused and still allowed crypto to a regulated exchange, and withdraw their fiat.
Short of banning all regulated crypto-exchanges completely, all they can do is add a step in the conversion to/from fiat.