You know, each year in April, many millions of Americans send a pile of paperwork to the government detailing their tax obligations. Often this paperwork is accompanied by a payment owed to the government. People also have money taken from their paychecks as tax payments.

Yes, regulations and laws are applied at the entry and exit points of the money system, and people who try to avoid those regulations run the risk of being arrested.

Having banks involved has allowed the current regulations. By getting them to follow rules it gets everyone else to do the same.

Now, you can still get around it if you are small enough, but it is the same with nearly anything else.