That's just a bunch of FUD. Tainting coins has not worked once in Bitcoins history.
You may define down, or otherwise minimize, as rigorously and deflectively as you like the term 'tainting.'
smooth and I prefer the functional definition, elucidated via praxis.
IE, if you wish to move your coins, but are prevented from doing so by consequence of some third parties' ostensible interest in them rather than technical obstacles, they are by the common understanding 'tainted.'
The nightmare scenario for you Old Whales is a whitelist, where by default movement of all non-permitted coins is forbidden.
Did you read the linked reddit discussion? Peter Todd makes some good points in this area, albeit on the shaky grounds of the slippery slope trope.
i think BTC-e is temporarily deluded at best.
first, they have no clear way of proving which coins were stolen. it makes no sense that the thieves would send stolen coins directly to BTC-e for sale w/o a few intermediate hops at least. similarly, "mule" activity can only be suspected, not proved. secondly, while i agree BTC-e has the right to choose to behave as they wish (it being a free mkt), the consequences of such actions will be to destroy their own business as internet of money (Bitcoin) will choose to route around them if their behavior persists. thirdly, i doubt they're acting out of pure ethics; the behavior is suspicious as the owners have been anonymous from the beginning making this freezing of coins highly suspicious. my bet is that they had some of their own coins on Evo and they're just trying to retrieve them. thirdly, do you really think they will just freeze the coins and then destroy them? hell no, they'll eventually have to decide to return them to their rightful owners, destroy them, or turn them over to some law enforcement agency (think DOJ). in the first instance, those owners will then merrily go off and spend those coins freely as if nothing happened and recipients of those coins will do likewise. in the second instance, destroying them would be an untenable act as the rightful owners (if they can even be identified) would scream bloody foul again destroying their customer base. if they try to hold them "forever", suspicions will arise that they might eventually spend them themselves (BTC-e). in the third instance of turning them over to DOJ or some gvt (and here's the real zinger) what do you think they would do with them? Voila! we already have 3 instances of exactly what the feds would do:
auction them off. and this is where the ultimate hypocrisy comes from all this moral and legal parsing going on about this tainting issue. when gvts believe they have the moral authority to do what's right for them and them only (auctioning and running off with the proceeds from "illegal activity") they undermine confidence in themselves from the viewpoint of the people. i know that when i see these auctions going off on SR coins or the auction the Aussie authorities are planning, i think hypocrisy, ie theft. this is why the Bitcoin community will ultimately give those tainted coins a pass and accept them in everyday trade. if the gvt can do it, so can they. this "pass" just takes time. in 2 wks, this Evo thing will have blown over. furthermore, if the community refuses to do this, it means the end of Bitcoin as what is paramount is the principle of fungibility.