yes because thats clearly how money should work.

Banks have rules to deal with money laundering indeed.

That's how diamonds and gold work. You wouldn't accept blood diamonds for example, it would reflect poorly on you.

You wouldn't accept diamonds, it would reflect poorly on you.

They are mostly a non-scarce fleecing operation backed by a marketing gimmick.

Diamonds are scarce. Manufactured scarcity still results in actual scarcity.

Let's say you happened to make a transaction with someone who you didn't know to be a criminal. He buys a nice ring for the girl on his arm and gives you $1K in marked bills (which are bills that have serial numbers recorded by some agency).

Now in that case, he's flashing around cash, which is not that uncommon say in certain locales (Las Vegas comes to mind). In that case, the cash you received doesn't lose any value. Though you may get questioned by the police.

Now ink stained bills and bills glued to each other should be rejected since they were likely from a bank or atm heist. But that makes it easy to spot.

Isn't that what BTC was trying to compete with?

I wouldn't accept diamonds at all, as they're not money like gold is (and definitely not fungible in either sense of the arguments).

"Diamonds are bullshit" and people only think they have value because of a De Beers marketing campaign in the early 1900s.

https://priceonomics.com/post/45768546804/diamonds-are-bulls...

Plus a ton of other discussion:

https://www.google.com/search?q=diamonds%20are%20bullshit

Well diamonds are fungible for any definition of the word you may choose and for the vast majority of the stones. Some of them are unique in that they're very large, very pure, have been worked on so much they are identifiable, have an IAG number engraved, etc. but the vast, vast majority of diamonds you can trade at any diamond shop in a very fungible manner, no questions asked.

Interesting. If I go to the website:

https://www.chainalysis.com/

Their big tag line is "Building Trust in the Blockchain". I thought BTC was above needing to do that.