I always wondered about this, and figured I was missing something. If every transaction is recorded for eternity, then tracking funds is just a matter of linking wallets to individuals, which while that may be difficult, it's not impossible. Certainly not with the kind of funds that three letter agencies command.

I always assumed the closest you could get to anonymity with any blockchain based coin is to use a burner wallet, and convert it cash as soon as the transaction is complete--but that's just using cash with extra steps.