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How? There's no way babysitting something like this to keep it to legal stuff wouldn't be be a full-time multi-person job, and that's before even starting to consider different legalities for different places.
I mean easy, if you see a listing for "heroin" on your instance, ban the acct, hell report their IP if you want. This isn't alphabay, there are already better marketplaces for heroin. To your point, how does lemmy exist with CSAM, isn't that a full time job?
So people selling drugs will just call them something that isn't filtered or known to all the squares, just like they have done for decades on Craigslist.
It's easy to say a marketplace app will be limited to legal stuff, but making that happen in reality is no simple prospect and federating it won't make it any simpler.
Guess we need to shut down every marketplace ever IRL and online then.