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If transaction obfuscation violates laws regarding trackability of financial transactions, then and cryptocurrency that builds obfuscation into their protocols has a product that is inherently illegal. It would be no different than building any feature into software that violates the law, say DRM circumvention as an example.

However I don't know if obfuscation alone would be considered illegal: In this case, the services went beyond merely facilitating obfuscation. They were not properly registered as a Money Services Business, and they specifically marketed their services for use in illicit transactions. Going back to the DRM example, it's the difference between software that has legitimate uses but could be used to break DRM (Think binary editors to crack a video game's DRM) as compared to advertising your binary editor not as a general purpose tool, but for that specific illegal purpose.

(Disregarding, for a moment, the philosophical issues surrounding the use of DRM, on which I tend to lean more towards less use of DRM)



We also have the prior art of: cash.




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