I agree. But if not for privacy, why use crypto at all? Even bank accounts are reasonably private, if you are not doing anything considered suspicious by society.
Also, with mixers such as tornado_cash, laundering money is ,sadly, pretty trivial.
The difference is that laundering provides you with an explanation for wealth and/or income. Example of laundering: buy a business (with clean or borrowed money), have fictional customers "spend" their cash money at your business every day, then report your income and pay taxes. Now if anybody asks about where you got your money, you have a seemingly legit explanation.
Mixing does none of that. So mixing may be trivial, but laundering is not.
edit: now that I think about it, is that why NFTs are so popular? Are people pretending to have gotten capital gains, while in reality they're buying these things from themselves? That would explain a lot.
Regarding NFTs, that's how the high art market works. It's for money laundering. "I just sold this Picasso, that's where this money came from Mr Taxman"
tornado.cash puts your crypto in a completely fresh account (using smart contracts). You can claim that you earned this crypto mining it back in 2010. You can definitely come up with a decent excuse for this.
Then you can convert those crypto (in new account) into fiat money.
Everyone will know you are lying, but they will never be able to prove it.
If you read the indictment, they claimed they had bitcoin from mining in 2011, the exchange asked for further proof, and they just abandoned the bitcoin (~$150k). The exchange surely notified the authorities, because who abandons $150k of legit bitcoin?
So claiming it was from mining didn't work in this particular instance.
They don't need to prove you are lying in all instances, it's enough to prove you are lying in one instance. They will get you for that one instance where you didn't launder it properly if they are after you.
I love how you're just realizing that NFTs are a pure money-laundering scheme. Just wash trade your bored ape and "sell" it to your alter ego and bam! Legitimate income for the cost of some ETH gas.
> This is called “money laundering,” and the essential component of money laundering is generating fake taxable income. If you take $13,800 out of your (legitimate, previously taxed) bank account, and you use it to buy cryptocurrency in a wallet that you tell your accountant and the IRS about, and you then use that cryptocurrency to buy a Meebit, and then you take $50 million out of your sack of illegal money, and you use it to buy cryptocurrency in a wallet that you don’t tell your accountant about, and then you use that cryptocurrency to buy the Meebit from your declared wallet, and then you take the $50 million of cryptocurrency out of the declared wallet and put it back in your (legitimate) bank account, and then you write the IRS a check for $20 million saying “ah I’ve been selling NFTs, what fun I have had, but I have to pay the IRS my fair share,” then … I am obviously not going to give you advice on crime but it’s possible you’ve got something there? Like, nobody has any idea what a Meebit is worth, so this string of outlandish numbers is somewhat plausible? It’s possible that some number of NFT wash trades have a purpose other than pumping up volume on NFT platforms?
You can do that by owning crypto. No need to use it.
> Self-sovereignty
Majority people use centralized exchanges, which regularly control transactions.
> Ease of use/trade/leverage/exchange
Fiat banking is much easier to use than crypto. It's also faster. Now everyone uses 1-tap payments. Crypto transactions are more complicated than that. They also take longer. Also are bad for the environment (not as bad as media portrays, but bad nonetheless)
Even the apps built off of the "blockchain" rarely touch the blockchain. Companies aren't looking up NFTs on the chain, they're just hitting OpenSea APIs.
Speculation for IDOs usually requires directly interacting with the contract with your wallet. Likewise new tokens are found on DEXes which requires taking custody of the token.
Borrowing against crypto, leveraging it, going delta neutral, buying options are all available on chain, typically with better yields, and with a higher variety of tokens.
Also, with mixers such as tornado_cash, laundering money is ,sadly, pretty trivial.