The emerging surveillance system in the traditional finance system, with the creation of FinCEN in the US in 1990, and FinTRAC in Canada in 2000, is massively centralizing power and can exacerbate financial exclusion:
https://reddit.com/r/MakerDAO/comments/de0sys/kyc_is_absolut...
The existence of crime and terrorism does not justify warrantless mass-surveillance. People in a free society have a right to privacy, including in their financial transactions, even if that privacy may facilitate some criminal activity they may choose to engage in.
Absent a criminal conviction, or at least a court's ruling that there is probable cause, they should be presumed innocent and secure in their right to privacy, not presumed suspect, and obligated to disclose private data as a condition for being permitted to engage in interactions with other private citizens.
Beyond this consideration for basic human rights and the foundations of a free society, by some accounts, KYC is the most ineffective policy experiment in history:
https://www.tandfonline.com/doi/full/10.1080/25741292.2020.1...
If the eye of sauron wants to destroy something, surely it can't be all bad?
Note that I do not support Gov banning crypto.
I see two things: 1. That there's a legitimate threat to their power and existence which they would do anything to mitigate.
2. Also, it could be that majority of their population are being exposed to unhealthy risk.
Take the case of Nigeria for example. MMM a ponzi scheme rocked the country in early 2017. People lost a total estimate of about 18 billion Naira (or $60m as of March 2017)
* https://en.wikipedia.org/wiki/MMM_Global
The Government actually warned people, but the Government has gained reputation for stifling any form of growth. Therefore, no one listened.