I understand this position, but when the money involved is crypto -- which is inherently highly "launderable" -- I'm not so sure. Why run your money through a cat when you could run it through a mixer?
If you use the proceeds of your online drug business to buy virtual cats from yourself, you can tell anybody who asks how you made your money that you made it selling virtual cats on the internet. And back it up with documentary evidence. That's better than simple avoidance of direct ties between your money and illegal activity.
Because your money is guilty till proven innocent. If you can’t show the legit origin for the money, they will take it.
I disagree with the policy, but that’s how it works. Using a mixer makes it more difficult to explain the source of the money, it makes things worse not better.