The problem, as you alluded to, is that we can evade all kinds of laws with software and technology, but in the end we live in a society that has rules, like not to launder money.
This wasn't my point.
Sorry for misquoting - wasn't intended!
So, when a CEX imposes KYC or some other arbitrary rule, such as "tainted coins", don't try to figure out a technical solution, such as improving privacy on a protocol level with cryptography. Just don't use the exchange.
I wholeheartedly agree with this. As I said before, someone
trying to define taint and starting to censor certain transactions, should be cut out of business by all its users, just like people would stop going to a store that suddenly defines some of their paper bills as tainted and stops accepting them. I mean, it's a major inconvenience at least; going shopping, with all the stuff in your basket and being denied at the cashier, due to handing a dirty, old bill or one that has microscopic amounts of cocaine on it. Nobody would be interested in that; so they'd go to another store.
We need to see the same thing in Bitcoin and 'Bitcoin taint freaks'.
What we can do?
Run our own nodes, hold our keys, accept any Bitcoin and refuse any random arbitrary party's definition of 'taint'. Otherwise an economy doesn't function. Nobody checks a dollar bill's serial number or the substances found on it. Everyone just accepts it and uses it, certain that it will be accepted.
If someone were to start differentiating which bills they accept, they would be cutting themselves out of part of the economy; we should treat those who try to have this attitude on Bitcoin, the same way. Stop making business with them if they don't want our coins, instead of trying to convince them our coins are good (by sending KYC documents or whatnot) - so they understand they're cutting themselves out of part of the economy, not the other way round.
