That's an unreasonably charitable reading of the purpose of KYC. It's primarily about government control of the primary medium of economic exchange. As always, this benefits the privileged at the expense of the less privileged.

Its use to limit competition from cryptocurrency is a perfect example of that. A major market which crypto was supposed to be able to serve - the "unbanked" - are largely locked out of it. Turns out giving poor people access to money is not a feature that the system wants to allow.

The benefit you claim for KYC is a marketing bullet point side effect at best.

It doesn't really matter what use cases cryptocurrencies were supposed to have — their actual use cases turned out to be scams and speculation. We can wax philosophic about the failed promise, but to a rounding error scams and speculation have always been their only use cases.

Which makes it very understandable that crypto companies became subject to KYC laws as they tried to scale up to serve the American public! Online gambling and securities trading are already subject to KYC. The rest of the activity is the scams and crime that (despite your cynical reading) KYC was intended to fight in the first place.

> As always, this benefits the privileged at the expense of the less privileged.

This is all quite a naive look at the world. The least privileged don't have any money, so by definition aren't hurt by KYC.

Capital is power and power makes the world go round. If the powerful of the world desire one thing above all else, it's not to have any scrutiny over how they acquire more power and make use of it, with financial privacy being a very large part of that.

Financial privacy is without doubt important for the regular citizens, and we should have laws in place that protect it. There is no reason for the government to have access to your transactions outside a well-functioning system of checks and balances, court orders and warrants etc.

But financial privacy maximalists strike me as useful idiots for unrestrained power. There is nothing good that society has to gain from allowing anonymous transfers of billions of dollars across borders. Once you tolerate anonymous finance, an entire bestiary of crimes and abuses become possible or easier, without any benefit for the common man. This was widely the case in the second half of the 20th century, and the financial industry had no problem laundering the profits made from the misery and death of the wretched of the earth, as long as they got their cut.

KYC is foremost a tool for democracy and checks on power. It's not the only tool and it can't operate by itself, but you need it in place before you can even ask the question "what are the reasonable and socially useful limits of financial privacy?"