The only way to stop money laundering is to stop all money from flowing. The AML programs currently in place in banks already pose significant impediments for law-abiding people to do their banking.

This kind of guilty-until-proven-innocent lack of due process, and invasive questioning of one's personal financial activity, is creating a highly centralized banking system that obstructs the flow of capital and will undoubtedly concentrate power in the hands of a few, and it's all being done in the name of safety.

Creating a vast graph of the populace's significant private transactions, and giving a privileged elite working for a handful of government agencies exclusive access to it, while enabling the small subset of the population who work in the banking sector to extract intimate trade secrets from bank clients, in the name of KYC/AML compliance, will create information asymmetries that inevitably lead to wealth/power asymmetries, that in the long run, will negatively impact safety, by making the socio-economic structure less efficient and more fragile.

It's exactly the opposite direction that society should be going.