One of the early hope for Bitcoin was that Bitcoins would be 100% "fungible", as in : one coin is exactly like another. Unfortunately, because the Bitcoin bloc

One of the early hope for Bitcoin was that Bitcoins would be 100% "fungible", as in : one coin is exactly like another. Unfortunately, because the Bitcoin blockchain is fully transparent (all transactions can be seen by everyone) that assumption has turned to be largely incorrect: where you coin comes from matters a great deal, and if it came from a suspicions source, it is "tainted". There are numerous effort to fix this gaping flaw (Monero, ZCash, the various mimblewible based coins, and even some efforts in that direction on the Bitcoin chain like coinjoin), but tracking where from an where to money flows on the Bitcoin chain is still very easy today. Coinbase is taking full advantage of that to rub the regulator the right way.