Forgive my oversimplification - the financial system has many more methods than just freezing though. Tracking, reversing, and limiting international movements come to mind.
My point is that while I agree with the risks you imply with traditional finance, the crypto we have today has not fixed the issues in traditional finance and has introduced many new ones. Hard to calculate but it feels like a net loss in my book.
Feels like a far cry from the “fail safe” you mention. Yeah it’s a fail safe from a government intervening in your financial affairs, but it’s also a fail safe from them protecting you by intervening in others. It’s the opposite of collective action. It’s every human for themself. This is not an improvement.