> If you want to use services that ignore what you can spend money on and what you can't, you literally have to use illegal services

Cash between friends is not illegal. Venmo, for lots of people including me, just replaces cash for paying your friends back. That's even their #1 example they have on their website for why you might use Venmo.

There is no agency or anyone in charge of asking what I'm spending the money on when I give my friend a $5 for lunch. If Venmo wants to replace that experience, they can't refuse the payment because they think I'm suspicious and expect to keep my business.

I understand the pressure they are under as a payment processor. But the alternative to Venmo to keep payment privacy intact is not illegal, it's just plain old cash.