Re: So where would they move it to?
>Not China or Russia, for obvious reasons.
I don't follow your logic here. Encryption is mathematics and so is country and culture independent -- the Russians and Chinese working in this field are going to be just like anyone else in the world. The governments of these countries know that this type of conference enhances their prestige and profile so they're probably going to do anything it takes to make the conference successful, up to and including leaving the participants alone.
Its only in the US (and among our hangers-on) that we have the hubris to think that the world owes us a living. For all I know this pettiness isn't a bureaucratic SNAFU but payback because the way that American law works means that no viable crystallographic system can be developed in the US -- the onerous licensing demands make it more trouble than its worth.