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.
To allow the ICO team to conduct a KYC audit, demanding confidential information from investors, states would first need to ensure that such an ICO team is not itself scammers. We all know that the percentage of fraud among ICO teams is at least 30-50 percent, and at the same time they are given the right to collect such important information. This, at least not logical.