A lot of people don’t understand that when you deposit to say, Coinbase, they are looking at the COMPLETE history of your wallet back to genesis. If there’s anything they don’t like your funds are toast.
Now, I'm sure there's a place for a reasoned discussion about the breadth of laundering regulation and how it might be improved. But your position seems to be an absolutist one (that AML simply can't be allowed in crypto), and it's not clear to me if you realize that.
Nah, they're definitely in the business of regulatory capture. But they have to be. If they don't capture the regulators, someone else will.
They want "Distributed Code is Law" AND "Openseas validates NFTs"
If you have a functional governance system, you can implement some form of vetocratic de-listing mechanism. It doesn't have to stop the de-listed item from trading but it is a mechanism for a community to collectively decide what is and what isn't a scam/forgery/theft/etc. This same system generalises to a central source of trust for a given network, service, or protocol where the control is decentralised.
Now this falls back to the first condition which is to have a functional governance system. Any failure in the governance system is now a failure in your system for deriving trust.
Can it be done? Yes. Has it been done properly yet or even really been done at all? No not really.
This isn't to say that it's impossible but we aren't there yet by any stretch of the imagination.