And Coinbase happen to be the biggest one.
Please think, in the future, this will be the norm. All major service providers are going to end up like this, it's only a matter of time the government throws endless resources into blockchain analysis linking it all to all possible gateways like exchanges in order to catch everyone that is unlucky to be holding coins that are traced back to criminal activities.
The *only* way to counteract it is to make it impossible by improving bitcoin privacy at its core.
How do you suggest to improve the privacy of bitcoin when you can monitor everything ,the government will come up with solutions to identify major players in the bitcoin echo system in the future without a doubt,until then everyone is free to trade without any restriction.It is really unfortunate to see police knocking at doors just for handling bitcoin,if that is the case.
You don't wait "until then". That is a recipe for disaster. You get ready before things happen. And im certain governments will only get increasingly tyrannical as BTC reaches $10,000 and starts challenging gold as a solid store of value outside of the system. I count on the likes of gmaxwell and others that understand the importance of privacy, to keep thinking about innovative ways to obscure bitcoin transactions (ideally at protocol level)
Definitely something to look into, I don't want to seem like a shill but it definitely looks like going through a mixer is a good idea and it'll only be a better and better idea as time drags on. The more you can obscure your funds the better I'd say.
It's almost depressing to see how aggressive governments get when you get outside of their system and start to use things not directly under their control. Either way, we have interesting times ahead of us.
But you are missing my point. No matter how much you mix coins, you don't know if the coins you are going to end up with, will have a criminal origin or not. Mixing coins is good to stop a trace of someone already knowing that it's you who is receiving the coins, but it is useless when it comes to protecting yourself from the bad luck lottery of ending up with tainted "criminal coins".
There's no way out but to obscure the entire blockchain somehow and I have no idea how this could be done.