A sufficiently authoritarian regime can outlaw pretty much anything they want, if they're willing to be heavy-handed about the enforcement and make a mockery of

A sufficiently authoritarian regime can outlaw pretty much anything they want, if they're willing to be heavy-handed about the enforcement and make a mockery of the justice system in the process—both of which can be observed in the anti-money-laundering regulations. Enforcement won't be 100% effective, of course, and the collateral damage would be enormous. It won't have nearly as much effect on the actual "bad guys" as it will on ordinary civilians. However, nothing prevents them from passing bad laws banning encryption. Which is exactly why such disastrous policies need to be strongly opposed.