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I agree that so many people use crypto for fraudulent activity, but introducing means to trace them would be a bad idea.
What about fiat currency? Does this imply that people do not use fiat to commit fraud?
Most of the time, the government is looking for something to blame for their failing economy, which is why they have decided to label Bitcoin as a commodity that aids in the success of fraudulent activities, which isn't entirely true.
Permit me to say but in my country, some lazy/greedy people who still engage in that fraudulent activity still use fiat transactions to carry out their scams.
P. S. Do not use the terms "Bitcoin" and "crypto" interchangeably, as they are not the same thing, and you should know by now, if you didn't already, that Bitcoin is far better to the other coins (cheap copies of Bitcoin) that are being introduced into the market.