It is not a conspiracy theory. It is literally how financial regulations mandate the financial system works.

Non-cash anonymous financial transactions have been no-no for a long while, in particular under AML/KYC.

Over a certain amount, even cash transactions get wrapped in KYC/AML papertrail for law enforcement facilitation.

Indeed. But I wouldn't consider ZCash to be in the same category as Monero, not with the way it was pre-mined, the sketchy key ceremony, the developers' willingness to co-operate with law enforcement, and the unshielded-by-default transactions.

I'm out of the loop. Why does it matter if they cooperate with police? That would be like signal's big brother, right? If it is secure then there's nothing to really give them. I did hear they are removing the unshielded wallets and fixing the ceremony process fwiw.

Because the main use-case of a privacy coin is for illegal transactions such as drug sales on the dark web, so co-operating with law enforcement entirely defeats the point.

note that if they lied in the ceremony process, the only thing they could do is undetectably mint zcash. they would not be able to deanonymize shielded transactions

That's not a very comforting thought...

That coordinated effort is not some big mystery; the exchanges that operate in major jurisdictions cannot offer Monero due to AML/KYC compliance rules.

Monero is only available on the exchanges operating on the fringes of the banking network, or which don’t connect to banks at all.

Thats not a conspiracy theory, they're about to implement mandatory flagging of non-exchange addresses. If you want to send or receive from one you'll need to provide the name/address of the counterparty.