Good points! Thorchain (a non-custodial service) claims 1.9B total swap volume. So, while not viable today for billions of dollars, the Bitcoin -> Thorchain -> Tornado Cash pathway seems to be viable for smaller amounts. Which doesn't necessarily bode well for recovering stolen bitcoin (and other crypto) in the future.
A thief still has to figure out how to convert crypto to fiat. But I am assuming that there are jurisdictions where this is possible without KYC.
I was thinking that there are probably thresholds that trigger alarms when large amounts of crypto are converted to fiat. If crypto is coming from a clean address, there is not evidence of illegal activity. But there is still the question of where those funds originated. So I am not sure if government entities can seize those assets...
A thief still has to figure out how to convert crypto to fiat. But I am assuming that there are jurisdictions where this is possible without KYC.