It's when you send cryptocurrency to an address nobody has the keys to, or that is the cryptographic equivalent of a black hole (provably inaccessible).
The problem GP is addressing is that the regulators aren't really incentivized to make the bad behavior stop because they are collecting revenue by letting it continue.
And just as in that thought experiment, it is entirely obvious how to get to an outcome that is better for everyone: cooperation.
Ya its called being a cartel. 1000+ members cartel (city/state/national govts) is just extremely unstable and short lived. Think Amazon HQ2, Brexit and others as trust busting done by free market. The Cooperation is not going to work.
