That is my first thought, I do agree with you.   They can comply with KYC and just refuse to do business with this individual not known to them, if thats the problem they raise.

Its basically nonsense, crypto used to be free of this red tape highjacking and now its become a travisty like the rest of every corporate enterprise that sits below government.

Its perfectly straightforward to reject a received value and return to sender.  Unless they absolutely know these funds are illegal and are certain to contact authorities to pass over funds.  If there was some strong suspicion or evidence, I can understand every business has an unstated purpose to stay legal and within the boundaries of the law of the country its situated in.   Thats not a point that needs to be argued, companies dont wish to put themselves at risk so its justified.

   To disappear with someone elses value indefinitely and benefit your own interests with this value, thats easily observable as corrupt and should not be allowed to pass without notice from the wider community.