Let’s say a drug dealer takes $10 million dollars in illegal earnings and spaces out crypto purchases anonymously using ATMs.
The crypto gets transferred to a DEX and XMR is purchased.
That XMR then gets sent to several wallet addresses and declared to the government.
The government can’t trace the XMR so the drug dealer can say that they invested several thousand dollars in Monero back in 2015 when it was less than $1 and now they have close to $10 million dollars worth.
The government can’t push for proof of the source of income and has to take the crypto “rags to riches” story at face value. The IRS takes their 35-40% cut and fucks off. The dealer is now legit.
How much will the government scrutinize this dealer if he’s “out of the game” and can’t pin shit on him?