“As an ETF would acquire bitcoin from these established bitcoin native capital markets, ETFs could provide liquidity for wash trading, and money laundering or be the exit liquidity for scams or sanctioned countries or entities.”

This is true I think this is the main reason a spot will never be approved. I often think is this a blessing in disguise to prevent criminals getting access to capital. Or are we punishing the masses for a few bad apples. Age old question