I do not think you understand the purpose of regulation or what those within the regulatory community are trying to do. Regulators do not innovate, nor do they stifle innovation. They are there to protect players within a market by establishing clear rules of the game and enforce those rules. This need has become apparent within cryptocurrency as is evidenced by the numerous pump-and-dump and Ponzi schemes. Without regulatory enforcement, these nefarious actors would be able to continue without recourse, which would do irreparable harm to the market. How could you trust any actor within the space if each actor can define their own rule-set?
Self-regulation is an oxymoron. Self-regulation assumes all actors have the best interest of the community in mind. We know this is not the case. Human nature dictates that some actors will work to subvert the rules for profit. While everyone should be encouraged to voluntarily follow the rules, you must have an enforcer to verify compliance with those rules.