Those who enforce money laundering laws don't mess around: If your money is clean, you're just shooting yourself in the foot by erasing the record of how you got it.
Guilty until proven innocent is an untenable practice if you want to run a profitable business. The market will sort out any ridiculous practices that makes you prove you haven't laundered in order to participate in a market and as I've said, the alternatives already exist.
edit: as for DEXes that's my whole point, you trade a crypto with "bad history" for a crypto without bad history and just like that even the strictest exchanges will happily give you an off ramp into fiat
Even in your jurisdiction, you may soon have to. From the linked article, you can infer that you got lucky - your attempt to cash out might have been stopped by an exchange, if you did it a little later or with a little dirtier coins.
> and if I had really wanted to I could have traded into fiat via direct trades using sites like localbitcoin.com or similar
Good luck meeting random strangers and trading BTC for cash with them safely AND anonymously. You're lucky if you get even one of those two.
> Guilty until proven innocent is an untenable practice
Tell that to financial crimes investigators, whatever they're called where you live. As I said, they don't mess around. They're not reasonable. The price for operating in the legal economy is that you have to be able to account for your assets. The exchanges don't do this because they want to, but because they have money laundering cops breathing down their necks - and you will too, if you're silly enough to try to cash out significant amounts through localbitcoin or similar.
and as I've stated, using a DEX to trade from dirty coins into clean coins is cheap and simple. I think this whole thing is just paranoia, but in the event it actually does become an issue for law abiding citizens (such as myself) the market has already accounted for the nonsense and given me an avenue to continue to operate effectively and legally.
> Good luck meeting random strangers and trading BTC for cash with them safely AND anonymously. You're lucky if you get even one of those two.
I've done both frequently and with nothing but success - I'm wondering if you've had experiences otherwise as I know plenty of people who use that site and have had nothing but success.
> if you're silly enough to try to cash out significant amounts through localbitcoin or similar
I'm sorry, what are you talking about? Legitimate services with legitimate clean money is not silly.
Cheap, but not free. You're paying a premium. Which illustrates the article's point.
As exchanges are reined in, and off-the-record bitcoin for cash trades are cracked down on (google "localbitcoin arrests" to get an idea - that should also answer your two other lines), this premium will grow, and it may well grow enough to make the whole thing impractical.
Who is on the other side of that trade? If it's an identifiable DEX then doesn't that only work until cryptocurrencies from that DEX are defined as "bad"?