Except that there is no central list of 'what is tainted' and what's not, so even a 'clean' output by Wasabi's standards might be rejected from an exchange.
I did a small experiment in this post:
https://bitcointalk.org/index.php?topic=5395035.msg59905002#msg59905002One particular blockchain analysis entity found that approximately 25% of coins in Binance's hot wallet were part of an OFAC blacklist. Bittrex's hot wallet contained coins from known scams and hacks. Why are these exchanges accepting these coins which are tainted? The only logical conclusion is that different entities have different definitions of taint, which goes to show how arbitrary the whole thing is, but also means that coins from one CEX could be refused by another CEX.
We're trying to fight back by abrogating the bold part. Because the use of a mixer in itself does not constitute a crime even in Federal law (and we have to make sure that crooks do not attempt to make it so).
I've put franky1 back on ignore, but hilarious that he is still just repeating the same trash after I definitively proved him wrong earlier I this thread. By the very document he is using to support his red flag nonsense, even so much as buying bitcoin with a credit card or withdrawing your bitcoin to your own wallet is enough to earn you the exact same red flag.
It is clear that the problem here is not mixers, or coinjoins, or anonymous altcoins like Monero, or any other privacy tools such as Tor, or the users who are interested in maintain a bit of privacy in the face of the ever increasing global surveillance we are all subjected to. The problem here is governments and centralized exchanges which want to turn bitcoin in to a surrogate CBDC, where you can only interact with bitcoin on approved, KYC enforced platforms, under the watchful eye of your overlords.