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> Using a mixer would taint the mixer and every wallet it sent to. I'd think this would end up tainting almost everything before too long.

Is that actually an issue? I am looking for it but I can't see a downside.

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It was at least in theory an issue when they tried to sanction mixers. In fact people would purposely send tainted crypto to well known wallet addresses of celebrities etc. making them technically run afoul of OFAC

Depends on your goal. If you want to keep the system going while blocking "dirty" money, it's not going to work. If you want to use that as a stealth method of banning the whole system, then full steam ahead.

Would banning the whole system have any downside? It's still unclear to me what crypto is supposed to be useful for.

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