I keep hearing this argument from bitcoin enthusiasts, and I don't understand why this is a bad thing. Electricity for heating, for cooking, for entertainment is constructively used. Cryptocurrencies are the only case I know of where electricity is deliberately used to the minimum possible effect, with verification that that was the case. The only benefit is the thrill that people get by using them to speculatively gamble.
A utility isn't an end goal, but rather in order to enable some activity from it. Utilities are provided such that they can enable some benefits to society. Using a utility in an unexpected way that benefits society is a fantastic thing. Using a utility in a way that is not beneficial to society, and that prevents beneficial uses of that utility, then it is perfectly reasonable to restrict usage.
In this case, since monitoring for cryptocurrency validation would be indistinguishable from productive high-electricity usage, a better solution would be to target the exchanges, to remove the incentive for cryptocurrency validators to waste electricity. Cycling through other currencies would then be treated like any other form of money laundering.
