Yes
>Am I myself in trouble for having (co-)designed a mixing service [1]?
Possibly? Depends on the details.
Then american banks should be sanctioned, they are also involved in money laundering too.
Why aren’t these banks put on the sanction list where it’s a crime to do business with them? Because the vast majority of what they do is not money laundering and when they are discovered money laundering, they generally stop. And when they don’t, they are added to this list: https://www.treasury.gov/ofac/downloads/sdnlist.txt
Whereas Tornado Cash is a service that is known to enable huge amounts of money laundering, and nothing was done to stop it.
What could be done to stop it? It's just a contract run on the blockchain. I suppose they could limit throughput, but not much else?! Similarly, what could the Monero or ZCash developers do to stop money laundering on their blockchains? Here, not even throughput can be limited since amounts of transactions are completely hidden.
Dunno. If you learn your product is being used to commit crimes and can’t figure out how to counter it, you should stop building it. (Or at least pause and call a lawyer.)
Does this exist?
But crypto-bros will be crypto-bros, wether they are the minnows hoping against hope that they can somehow move from greater fools to slightly less foolish or the sharks grifting all the minnows for every penny they have.. just kept living in denial or .. selling denial in the case of the sharks.. and now here we are.
It turns out that when you ask the global financial systems what they call a service that does what a mixer does, they reply 'a money laundering operation operating in plain sight'.
More interesting and recent is zkKYC (2021): https://eprint.iacr.org/2021/907