How is Bitcoin (or any other cryptocurrency for that matter) going to survive being a tool of money laundering and terrorist financing?

It is my guess that only a very small part of the crypto transactions relate to illegal activity.

Most likely it is done in private transactions outside of centralized or decentralized exchanges.

Most of the crypto-transactions are legal and almost all participants on centralized exchanges are identified at the registration.

The issue with illegal activities is amplified by financial authorities in US and EU so that it can be used as an excuse to police every transaction, most of which are legal.

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