> But nearly all actual markets have some kind of regulation, and thus the potential for dirty money.
It is possible to have a wide variety of regulations without having monetary ones. Money is fungible. If you dump mercury in the river, you get fined or put in jail. It doesn't matter if the money you have to pay the fine with is the profit from the dumping or not, it only matters that it would bite enough to prevent anyone from doing it to begin with.
In particular, you don't need banks to investigate customers or know anything about them, and asking them to causes all kinds of otherwise avoidable problems. The people who should be investigating criminals are law enforcement, not corporations. And if the criminals use banks, well, then you can go to the banks and seize their money etc., after you've proven their crimes to the satisfaction of a judge. Instead of having Paypal do it preemptively because it's easier to screw over many innocent small businesses than deal with regulators when 2% of them cause problems.
None of those things are law enforcement agencies. And a casino is just a type of bank here.
Though the others may have their own reasons to want to know who their customers are, since a lot of property isn't as fungible as money and possession of stolen property is a crime in most places.
Notice how nobody even suggests for things to work that way in other cases where the business is accepting money rather than goods, e.g. businesses that sell sandwiches or jeans or flatware should hardly be under these types of KYC requirements.
If you can buy $1000 worth of apparel without identifying yourself, why can't you have a bank account with $1000 in it?
You don't seem to be engaging with my point; perhaps I didn't make it clear.
There are other businesses besides banks, of which I gave some examples, that attract criminal activity. We don't say "they may have their own reasons" to scrutinize their customers and leave it at that, because self-interest doesn't cure the problem. If you don't regulate scrap metal dealers, then the profit motive will lead them to cheerfully take material stripped by thieves, which encourages destruction and theft. Similarly with pawn shops.
The profit motive is exactly why such regulations are useless. The dealer will harass every honest customer in case one of them are the type to report them for not checking, and then pay pennies on the dollar for the copper pipes ripped out of a building which they know were stolen because both parties to the transaction are aware they're profiting from participating in criminal activity.
And the dealer may not even need to be in on it. If the thief lies and says the material was found in a dumpster at a construction site, or that it has been collecting dust in their basement for twenty years, and there isn't any way to trace a generic pile of metal back to where it actually came from, what does it matter that you take their name?
Which is why cities like Detroit are full of buildings that have had their pipes stripped out. The deterrent isn't the scrap metal dealers, it's that the thief goes to jail if caught in the act, so it only happens in places where people reach a level of desperation that isn't present in most other places.
And regulating pawn shops is even sillier, because the thief could just sell the stolen goods on Craigslist or at a swap meet or a hundred other alternatives.
These types of criminals are most commonly caught directly by the victims -- because they're the ones with the best incentive to actually do the catching. The people with the second best incentive are law enforcement. Deputizing disinterested third parties, much less ones with an active conflict of interest, is largely useless and generally does more harm than good.
It is possible to have a wide variety of regulations without having monetary ones. Money is fungible. If you dump mercury in the river, you get fined or put in jail. It doesn't matter if the money you have to pay the fine with is the profit from the dumping or not, it only matters that it would bite enough to prevent anyone from doing it to begin with.
In particular, you don't need banks to investigate customers or know anything about them, and asking them to causes all kinds of otherwise avoidable problems. The people who should be investigating criminals are law enforcement, not corporations. And if the criminals use banks, well, then you can go to the banks and seize their money etc., after you've proven their crimes to the satisfaction of a judge. Instead of having Paypal do it preemptively because it's easier to screw over many innocent small businesses than deal with regulators when 2% of them cause problems.