alt Hacker NewsTrue, but this does not happen for large transactions, due to being vulnerable to the $5 wrench attack (1)
For big transactions where something of actual value is exchanged, both parties will want an escrow, and this is where a public exchange comes in.
Except that there is a huge trusted network for this. The world does not revolve around americas and europe. Not everyone has issues cashing out millions of crypto from a bank. This has been especially prevelant with countries that host a lot of Russian immigrants ever since the SWIFT ban, the regulation is extremely lax and there is minimal data shared to western institutions.
I have heard from friends who are in these countries observing transactions that go into the millions of dollars that are being cashed out (not even laundered) like it's just another day. Nobody asks questions, nobody cares either and if you bring it up you will likely lose your job in few months or so.