While we should be here discussing how to better protect our privacy - for example ZK proof for KYC/AML - we are wasting time on how bad governments are
Do you even know what ZK and KYC mean? It is zero knowledge and know your customer. How can you provide a proof that you know your customer if you have zero knowledge about him?
a retailer receives funds. and pays out funds. they are not defined as a MSB/MTS nor mixer
In FinCEN proposal it says that you can only use bitcoin through centralized exchanges that require KYC. Their definition of "CVC mixing" is totally broad:
https://fincen.gov/sites/default/files/federal_register_notices/2023-10-19/FinCEN_311MixingNPRM_FINAL.pdf, page 30.
The term “CVC mixing” means the facilitation of CVC transactions in a manner that obfuscates the source, destination, or amount involved in one or more transactions, regardless of the type of protocol or service used.