this is an interesting observation! I'd say we can even stretch it a bit further, and make "taint" disappear exactly the way it does in fiat money: if a criminal has gained a $100 bill by criminal means, that money becomes clean the moment he spends it in a restaurant for a meal. Nobody would blame the restaurant owner as long as he doesn't know he's doing business with a criminal.
Back to the above: by this observation, the "dirty" Bitcoin becomes "clean" the moment it hits an exchange. If we extend that a bit, I'd argue it becomes clean the moment it's received by someone who has nothing to do with any crime. That's how fungibility works, and that's how it should work in Bitcoin.

this is an interesting observation! I'd say we can even stretch it a bit further, and make "taint" disappear exactly the way it does in fiat money: if a criminal has gained a $100 bill by criminal means, that money becomes clean the moment he spends it in a restaurant for a meal. Nobody would blame the restaurant owner as long as he doesn't know he's doing business with a criminal.
Back to the above: by this observation, the "dirty" Bitcoin becomes "clean" the moment it hits an exchange. If we extend that a bit, I'd argue it becomes clean the moment it's received by someone who has nothing to do with any crime. That's how fungibility works, and that's how it should work in Bitcoin.