So let’s say you have a Bitcoin. You buy it through an exchange. You transfer it to a hardware wallet.
You buy something with it. That thing happens to be illegal in your country and you get caught with it. If the cops also find your hardware wallet, won’t they be able to get your public key and see who you bought it from? Also how often you’ve been buying from that person and who else buys from that person to target?
Or.. let’s say you’re a ransomware gang who gets paid in crypto. Your target unbeknownst to you tells the cops after paying you. You have to get that converted somehow right? Won’t they just track those bitcoins to see who sells them and where it goes from there?
Or is it the case that people in these situations just transfer it to a different key a few thousand times, eat the small transfer costs and then say “hey, I just bought it off of someone. I dunno who it is”