It's a completely pointless task that will just hurt innocent people.
Bitcoin transactions are by their nature traceable through the blockchain- but ownership of them is not. In it's simplest form I might sell a coin to somebody for cash, the blockchain does not show this change of ownership and an outside observer now thinks that they are still monitoring the same persons transactions. If they were "blacklisted" then suddenly the sold coins are worthless, even though the original seller has had no adverse impact.
It has interesting extensions, where you are able to destroy other people's funds by tainting them with your stolen ones. The Bitcoin system does not, and can not support a system where the user can accept and reject funds. You can ignore inputs, but that gets very messy very quickly.
You end up in a situation where only institutionally "clean" coins are allowed, and the system collapses. How this ever came to fruition I'll never know.
Bitcoin transactions are by their nature traceable through the blockchain- but ownership of them is not. In it's simplest form I might sell a coin to somebody for cash, the blockchain does not show this change of ownership and an outside observer now thinks that they are still monitoring the same persons transactions. If they were "blacklisted" then suddenly the sold coins are worthless, even though the original seller has had no adverse impact.
It has interesting extensions, where you are able to destroy other people's funds by tainting them with your stolen ones. The Bitcoin system does not, and can not support a system where the user can accept and reject funds. You can ignore inputs, but that gets very messy very quickly.
You end up in a situation where only institutionally "clean" coins are allowed, and the system collapses. How this ever came to fruition I'll never know.