The architecture of staking on Cardano requires that a public staking key form part of the address at which all staked ADA resides. Were Contingent Staking implemented it would be possible for anyone to see whether or not a transaction is to/from an address staked to a non-compliant SPO. Regulators could specify that transactions to/from addresses staked to non-compliant SPOs must not be processed by compliant SPOs and/or lead to tainted coins that CEX/regulated services refuse to accept.