The point is that when a government seizes crypto funds and auctions them off again, the funds are clean for legal purposes but transaction history doesn’t chan

The point is that when a government seizes crypto funds and auctions them off again, the funds are clean for legal purposes but transaction history doesn’t change, it just has an additional transaction. Software that flags aspects of transaction is nullified by the reality that it doesn't actually know that one subsequent transaction cleaned the whole trail. There are hundreds of thousands of governments around the world when factoring in municipal authorities, even governments you don't respect are cleaning funds in the eyes of governments you do respect. In the eyes of the requirements of exchanges that have these automated chain analysis practices. Right now, only a handful of governments do crypto investigations and seizures, but as this increases it only moves towards the nullifying chain analysis, as many funds will be comingled with a flagged transaction but unknown to the software about how these funds have been washed by a nation state’s blessings.