Will startups be even a thing now that the VCs obviously just need to funnel all their money to 2 or so companies ad-infinitum for guaranteed returns.

The single most important question to be discussed on this website right now.

Whatever happened to those network states? It's starting to look like it's them, UAE or Singapore

Well, the network states were supposed to be a social thing rather than a place, no? Free Cities movement is more focused on actual, physical places.

Well... there are crypto startups, and perhaps a generous definition of "money"

Crypto companies were built for anonymous transfers of wealth. It's why they are perfect for money laundering and corruption. Venture backed companies are more difficult, since you would need a paper trail (equity, incorporation documents, beneficial owners, etc.)

It's not impossible, of course. It's not even terribly difficult, but it does require a different level of record.

(No, I'm not saying that the goons running the United States give a shit or won't do it anyway.)

VC companies do not dig into the numbers as you suggest. FTX was able to get away with their fraud for a long time for that very reason. VC companies don’t care if some of their investments are fraudulent as they spread their eggs so thin that it doesn’t matter if any given basket blows up. VC firms stated this to the press outright when FTX blew up.

Also most crypto companies are not good for laundering since the blockchains record that fraud forever and publicly. I could see some specific protocols where that may not be true — like monero or tornado cash — but these projects are not really startups. Most crypto startups pitch their products for enterprise customers and thus would be horrible for laundering money.