They are explicitly a product for user privacy. Given that the depositor can prove the source of funds put into tornado cash via a zk-proof there is no reason that this should be shut down.
That's the facade. In my experience, Bitcoin is still the main ecoin demanded in phishing/ransomware incidents, even when more privacy-friendly ecoins exist. A tumbler's purpose is distorting Bitcoin's public blockchain (one of its core tenets), and that's very attractive to criminals.
Mixers aren’t banned. A mixer that was used to launder money by North Korea was.
Banks which collect KYC and respond to criminal probes. Those that don’t absolutely get sanctioned.
Well, it's not banned, but over $10k USD in cash you need to fill out an IRS form 8300 [1] precisely to curb criminal use of cash. (Although I'd argue it should be upped and pegged to inflation as 10k isn't what 10k used to be.)
[1] https://www.irs.gov/businesses/small-businesses-self-employe...
Edit: See https://en.wikipedia.org/wiki/Haynes_v._United_States for NFA. Thanks below for Leary.
I think the 5th has been restricted enough by the courts that it literally only matters if you EXPLICITLY invoke it. (At least this is my understanding of Berghuis v. Thompkins.)
Similar for the NFA case - they can't get then for the failure to register, but they can still get them for manufacturing/possessing it (especially since it was amended after the ruling).
>they can't get then for the failure to register
A criminal filing an 8300 would be effectively "registering" their illegally owned money, including the source from who the money is received.
"and that you couldn't pay that tax without registering"
The form 8300 actually requires you to state both counterparties of the illegal transaction, which goes well within furnishing evidence useful in incriminating yourself. It's far more incriminating than the annual tax return, which shows an aggregate yearly amount rather than granularity of single transaction (or collection of "associated"-transaction) along with the date and name of both counterparties and a host of other details.