How do you prove that circulated coins are the product of a mixing operation and not just normal transactional flow?
Someone mines coins and gives coins to a guy who gives coins to a guy who gives coins to a guy (repeat n times) who gives coins to you, and every link in the chain is following best practices by generating new wallets for each transaction, how would the adversary prove that you're doing something untoward (and since we're discussing law at this point, beyond a reasonable doubt?)
You didn't really answer my question. Assume you're in some position of authority. With the knowledge that bitcoin wallets can be generated out of thin air, how do you prove that a given transaction chain was the product of a mixing operation and not the product of normal transactional flow?
Physical wallets can also be created out of thin air. I'm not a forensic accountant, so detailing precisely how is not in my area of expertise, but we successfully prosecute people for laundering cash, and bitcoin only has more information, more accessible than cash. I am not saying it can be done with just the block chain, but the block chain is a piece of evidence that is far more easily accessible than a criminal enterprises' individual ledgers.
Someone mines coins and gives coins to a guy who gives coins to a guy who gives coins to a guy (repeat n times) who gives coins to you, and every link in the chain is following best practices by generating new wallets for each transaction, how would the adversary prove that you're doing something untoward (and since we're discussing law at this point, beyond a reasonable doubt?)