[keymone]

this is not entirely correct. in A -> B -> C payment at no point does B hold A's money with a promise to pay it forward to C.

[AlexCoventry]

B's balance with A and C fluctuate during the transfer, though, and that is enough to at least make it look like a money-transmitter relationship.

The onion routing is very unfortunate, because it means regulators are likely to treat the network as a blatant money-laundering tool.