I don't know enough, but the moment I saw I needed to go through a Know your customer process I knew block chain privacy is compromised.

Wouldn't be surprised if there are ways to obfuscate your bitcoins. Something like wrapped bitcoins or something.

For the time being you already have block chain analytics companies that can trace and back trace transactions. Hell maybe they can even do it cross chain.

I wouldn't be surprised if a NSA or other nat sec organization can hack something together in a weekend.