I'd call the alternative (unlimited wealth and power for the criminal organizations because the government can't touch it) a far worse outcome. It's always about moves and countermoves.
There's no such thing as the perfect system. So we have to settle for something that at least works most of the time.
It's a politico-technological arms race. Government makes laws, people make technology that gets around the laws. With every iteration, they need to increase their tyranny to maintain the same amount of control over the people. The result is either an uncontrollable population or a totalitarian state.
The only question is: how much tyranny are you willing to tolerate before the government becomes worse than the criminals you want to stop?
That’s not really the case. The government mostly just makes one law that says “hey, bank, it’s your responsibility to know your customer and their source of wealth and God forbid you can’t when we come asking”.
I wonder what proportion of all Americans have actually had any kind of material interaction with KYC/AML. My guess is it’s approximately none of them.
> I wonder what proportion of all Americans have actually had any kind of material interaction with KYC/AML.
Impossible to know since it's illegal to tell someone they're the subject of such extrajudicial investigations. Even knowing about the existence of such laws makes them assume you're a money launderer because of your "technical knowledge".
There's no such thing as the perfect system. So we have to settle for something that at least works most of the time.