cryptocurrencies dont have eyes, ears or brains. they are just code. governments cant control the crypto because decentralised code has no brain. and authorities dont have the manpower to control, monitor all of crypto
however authorities can control the businesses and people that interact with crypto
government and law enforcement do not track suspicious transactions of any/all crypto currency themselves..
you will not find any office where cops or government leaders are sat at computers monitoring crypto transactions..
.. they delegate and use businesses to monitor their own customers and share information and then that information is used to investigate suspect crimes reported to authorities by the businesses
laws are made to cause businesses to become the monitoring services of their own customers
EG river financial/bitrefills and all other known services that do/will operate on lightning offering payment facilitation services such as routing and 'renting balance' will become the monitors and reporters
laws are made to cause a barrier of entry for small business/individuals to offer services, so that the larger businesses that are licenced(regulated/delegated) where they are set up to KYC/monitor customers actions become the defacto gateways that customers use to enter/exit/use crypto
You can't get proofs about that franky, personnaly I think some countries are tracking and monitoring crypto transactions of some of their own citizens themselves and several other countries are doing that on foreign citizens and then they exchange the informations they get with the legal countries of those citizens in order to circumvent their own privacy laws. It allows them to claim they did not violate the laws hippocritically. So people are maybe not tracked by their own country but by another country which will give those informations to their country actually.
there is proofs.. just read the regulations, policies and compliance procedures licenced MSB/PF have to follow.. then look at the details. you will see its not "government" watching everyone. any MSB/PF has to develop systems to monitor its customers and then comply to standards to report suspicious things to governments
in short governments dont get details of all transactions, just the juicy details of transactions a business has deemed suspicious enough to think government authorities might be interested in
this is the whole 'if your not doing anything wrong you got nothing to worry about' because if your not doing anything deemed as suspicious the government wont get a SAR report about you thus they wont see your interactions.. they only see/handle the suspect ones
though its the services and businesses that are collecting alot more information on users so its the businesses that are the main data collectors of all transactions..
businesses collect and store masses of data and keep it for many years. meaning if you operate legitimately without suspicion the government wont know about you. however if for say 4 years* you operate ethically.. but then involved in something suspicious, the business will SAR the suspiscious transaction, the government will investigate and if they find it meets a certain level of possible criminal involvement they can get a court order to ask the business for all 4 years* of data related to you. and then the government will get to know alot more about your activities which the business has collected about you and data assumed to be related to you
*random number i chose.... but most business store data for 6 years
The way I see this, the more of this the better. I couldn't care less about their investigations. What are they going to investigate? Who bought what? That's private information, but obviously the idiots from EU don't want you to have any privacy. They're becoming second China, with the difference that China is often criticized by them and they claim to be more civilized
This is another proof that governments want to make slaves out of us.
even china doesnt have enough government employees to watch all transactions.. even china delegate that task out to businesses that do the payment services
governments have always delegated monitoring tasks to financial businesses.. but when crypto was legitimised as a currency, then those same policies began to be put in place for crypto businesses to comply to also.
for instance river financial, bitrefills, bitfinex, etc will need to gather info on its LN users and partners and retain and share data on the routed packets.
you will also find that regulated payment services need to know about their channel partners whom if operating as a route would need to be regulated to. this will cause a cascading effect that routes then only flow through regulated channels where only the endpoints(edges) are then individuals
