>More regulation won't help here, because the regulation-maker is itself the hostile party.
It's easy to paint the big gov as bad, but this is a case where unfortunately the populace seems to be in agreement with the big bad gov. While most US citizens support encryption, 76% or so, the vast majority 63% also favor government "backdoor" access for national security reasons.
I guess either we believe in democracy or we don't. It could be said that if Veracrypt isn't/can't be backdoor'd, perhaps the gov is simply implementing the will of the people :( via Microsoft.
What does democracy have to do with electronic encryption? Democracy existed before computers.
There are legitimate reasons for governments to intercept information, with the correct oversight -- enforced legally in an "checks and balances" manner. The fact that there is a breakdown of trust between government and people won't be solved with more encryption.
Tyranny of majority is a thing. It's something mature democracies are aware of and have the ability to defend against.
We're in an interesting spot here and the tension is tangible.