Tainted? Rejected by who?

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anyone with a block explorer and enough knowledge to follow the money.

they are going to map the entire utxo set using existing KYC/AML info and assign confidence scores to all of it

large institutions will pay CA to help them avoid tainted, risky utxos.

Seems arbitrary and at an individual level the argument falls apart. Because a person or institution decides to not accept a specific utxo doesnt make that thing init of itself nonfungible.

Individuals can do what they please.

If there was only a list of exchanges oh wait...

Exchange is a keyword