Just for the record "terrorist" is the modern day bogey man. And watch lists and no-fly lists are used as much to punish politically inconvenient people as they are to go after real terrorists. The point is that if Josh did business with someone the government didn't like for any reason, any reason at all even if they have nothing at all to do with actual terrorism, they could cry about KNC and terrorist money laundering and come after everyone. It doesn't actually excuse Josh or GAW for breaking the law, do the crime do the time as they say. But throwing around words like terrorist or terrorism in regards to money laundering is easy to do and may not have anything at all to do with any actual terrorism or terrorists.
That is partially true. The vast majority of money laundering is related to the drug trade, then probably organized crime in general .. with a good dose too of tax evasion, and folks trying to get trapped cash out of foreign holdings in countries where it is expensive or impossible to remove cash outside the borders.
However, it is also true that among this mess of "ordinary" money laundering, many many terrorist organizations and state sponsors of terrorism who are under sanctions ALSO need money laundering services badly. The push-pull in US government circles is trying to support a new technology that is revolutionary versus having it also be able to support lots of bad things. Much like RSA encryption in the early days (when it was illegal to even use high bit encryption several years back). It is naive to think that someone coming to you with millions of dollars to buy XPY sight unseen, without any pretext of diligence, might not also have some darker purpose.