A more likely objective is the idea that the Government can interfere with Googles business model - an idea that (if the technology works) other Governments may choose to follow. Australia doesn't have the numbers to directly impact on scale, but of these changes have any measurable effect then other countries may choose to use it as an excuse to implement controls on Google - something they will likely want to discourage.
He could have had an amazing business, but his arrogance on controlling everything caused his downfall.
He gave his business opponent the means to destroy him
He has completely ruined his parents reputation, and may very well take them down with him
He's looking at spending the rest of his life in prison
There will be one or more three letter agencies helping the various Agencies to lock him up forever. If anyone makes the point that his services may have been used for money laundering or assisting terrorists then everyone will be involved - FBI, CIA, NSA, etc.
VPN"s are not magic - they don't provide protection against on-host malware or other cyber-security tools. Who owns the VPN? Lots of luck buying an encrypted satellite connection with the name 'Sam Bankman-Fried' - his name and face is too well known. Don't ascribe to genius that which can be explained by good luck.
Letting him have access and wire-tapping his systems could be an even smarter thing.
Given the massive amount of money involved I'd leave the door open for him to transfer funds out, record everything he does as evidence, and freeze the funds the moment they convert to cash.
You can write a small letter to Grandma in the filename. -- Forbes Burkowski, CS, University of Washington