KYC is stands for "Know Your Customer" and i think this is a system that identifies the true identity of a participants. And this KYC is important in order to validate cheaters and those scammers. But sometimes it can be used also by those scammers also by pretending to have a n ICO and will ask your information for their own benefit like using your information for bad intention and this is the disadvantage of KYC system implemented.
KYC (know your customers) can be cheated, KYC are required to know one investor where from.
But anyone can do KYC with fake identities, as many identification are stolen online, this is the risk on doing this system with some ICO.
If the ICO is a scam or even not we dont know if our documents are same with them or not.
I disagree with the statement "anyone can do KYC with fake identities". ICO's who requires KYC hires like a third party processing team who do Id checks and if they're are the one who do it for sure they're experts who can identify if it is fake or not. (I am working in a financial institution that's why I know it) that's why the only acceptable document would be national ID or any government identification to ensure that it will not be manufactured.
At first, I totally disagree with this KYC thing in crypto since we also aim the privacy and avoid Id theft but as I do a research this will help us to avoid scams and also to ensure that funds will not be used for illegal activities as well as some countries have regulations for crypto. And it also benefits us bounty hunters to avoid duplicate accounts so we could get the best out of the rewards that we will get.