Is there any solution yet to preventing stolen cryptocurrency funds from being spent? Isn't the only solution to have a central database and require laws to require every transaction to be pre-checked to see if it's stolen funds or not?
And not only that, the centralized system will have to be constantly keeping track of wallet mixing to see where funds are being redirected to, attempted to being washed to?
For fiat currency, there's usually a court system that can be used to determine ownership. Though often they explicitly exclude cash from that - if somebody legitimately acquires bank notes that were previously stolen, they can keep them and they are valid as legal tender.
For cryptocurrency, which jursidiction's justice system is going to determine whether something has a "stolen" marker or not? What if that's not recognised by a different jurisdiction, or someone else comes to the opposite conclusion?