Any way of making real money out of game mechanics (selling Pokémon, cashing out in-game currency) instantly turns your game into (a) gambling (assuming you have any kind of randomness at all, which virtually all games do), and (b) a Mecca for bots, scammers, gold farmers etc. Someone losing their account is no longer losing just some in-game items, they are losing real money, which gets the police involved real quick.
Diablo 3 actually did this exact thing at launch with the real money auction house. Shockingly, they didn't need crypto to do so! But it also didn't make them too many friends, and they had to pull it down a year or two later.
D2R trading is alive and well, the failure of D3 is more about it being a poor game, poor itemisation, every build was the same, nothing is worth farming except gold.
Diablo 3 actually did this exact thing at launch with the real money auction house. Shockingly, they didn't need crypto to do so! But it also didn't make them too many friends, and they had to pull it down a year or two later.