A tool that could be used for laundering money was used for laundering money. Developer is shocked that the US Government doesn’t like this
That argument doesn't work. In fact yes, the government understands that printed money is untrackable and we have extensive tools to deal with that, up to and including the formal sanction of entities that try to evade these controls.
This viewpoint issue is not limited to financial legibility of course. We do know that the underground economy, because data is only reported by authorities, is inflated or deflated for political purposes, further muddling any potential estimations. Oh, and plenty of what the IRS wish to do is just that - wishful, and only when it's convenient for the other party. You can try to regulate cash transactions domestically in a more heavy handed manner, but you're mostly going to affect those least able to afford it to begin with, and the costs involved may not be worth the effort. Oh, and US currency is commonly used abroad, including in place of native currencies in some countries. When it comes to cash, there are only estimates as to how much the government can reasonably regulate the transacting of, and the government's policies have undermined efforts to do so even when they could. Not everyone is in the cohort that posts on HN.
It's the same as asking "why do people need E2E encrypted chat," because they want to and there's nothing wrong with them not wanting you to read their chats, that's why.
The question was what other use the tool had. "Private transactions" are 100% isomorphic to money laundering, the only difference is the words you use to explain it.
In fact, "private transactions" are, in fact illegal. You're not allowed to do that in the industrialized world. It's true that small-value cash transactions are de facto private, in the sense that the government decides to look the other way and focus its laundering enforcement on larger players.
But no, that ship sailed decades ago. You're not allowed to have private transactions, because if you have them then the criminals will, and we as a society have made a bargain to give them up to reduce crime and corruption.
https://www.law.cornell.edu/wex/money_laundering
It's not just "private transactions."
https://en.wikipedia.org/wiki/Bank_Secrecy_Act
If you know a specific provision of any law that does prohibit such transactions, please post a link.
Where exactly do you expect to get that "large sum of cash" except from a bank? (Or conversely, what is the recipient expected to do with it except deposit it?) You're right that the enforcement of the law focuses on the entities (banks and other financial actors) who manage large transactions. If you had an "individual" doing that sort of thing regularly[1], you should absolutely expect to seem them regulated under AML statues.
What you want you can't have. You don't have it now. You won't have it in the crypto future. We've decided to make what you want illegal, and no amount of arguing on HN is going to change that.
[1] Like, for example, an operator of a money laundering tool on the ethereum network.
There are people who occasionally sell expensive things for cash, and people who keep a lot of cash in safes. My claim is that those activities are legal. You have not provided a statute or regulation saying it's illegal.
(There's no way for me to reference a statute for my claim, because we write laws saying what's prohibited, not what's allowed.)
There are not, not in practice. And to the extent there are they they do so by converting that cash to traceable assets in banks subject to know-your-customer rules who are able to attest to the validity of those transactions. To the extent that you have private entities doing very large, regular cash transactions that are not visible to AML regulators, that practice is not presumptively legal (nor common, except for literal criminals). You know this. I know you know this. Just ask a lawyer if you think you could get away with that. You can't.
Hiding behind a "if this and this and this were true then you could evade AML rules" as a technicality (effectively: that there are edge cases not covered under existing statutes) is not arguing for the legality of the kind of pervasive laundering enabled by a crypto mixer, and you know it.
But I'll quit since it's clear you're not going to reference any sort of law saying this is illegal.
This is just a digital form of that.
Or is that also an illegal/illegitimate use now?