Re: I can see Governments using this as an argument to ban Encryption outright
That's why it's important to make the distinction,
This is criminal enterprise creating their own system of encryption, while the government want to catch these people it won't be done by removing encryption because they are brewing their own. The encryption the government wants to break is the one that every normal person uses.
I would even go so far as saying that this is a perfect example of why they shouldn't break encryption, it's clearly a waste of time when those that it is intended to catch won't use it.