Let's be clear, BTC can’t and doesn’t need to be regulated. Bitcoin is run by a protocol, not by a central entity, which eliminates the possibility of an organization that could manipulate the BTC price and market rules.
BTC can be used to fund terrorism? Yes, it can, but every single Bitcoin transaction is recorded on the Blockchain, this means that anybody can see every transaction that has ever occurred from the account "A" to account "B". This makes Bitcoin much less attractive than dollars or euros to finance terrorism.