It prevents crimes as long as the people who would be committing them know it’s hard to cash out. As a simple example, phone theft was much worse in the United States a decade or so back because a teenager could grab a phone, wipe it, and get hundreds of USD. It plummeted once the stolen IMEI database went into effect because nobody buys a phone which can’t get service. It didn’t have to go to zero to be worth doing – just getting the easy money guys out often makes a big difference.

Sure, but "follow the money" can be an incredibly powerful tool for criminal investigations.

> With over reaching AML regime there is a danger that it is used against political opposition, like it is already happening.

That's a concern I definitely share. I think there needs to be a push for a privacy-preserving middle ground between the complete two-sided anonymity of cash and some cryptocurrencies on one side, and the data privacy nightmare that's traditional electronic payment methods.