The reasons for KYC in crypto are

- The government does not want people to run their own money system free from taxation.
- Banks were jealous crypto was unregulated, eating into their profit. They had a lot of regulations forced upon them after the financial crisis of 2007, the result of years of deregulation.
- Banks again. They want to slow down crypto adoption to catch up and corner the market with their own tech.
- Officially to prevent crime and terrorism, but in reality FUD to get public support for regulations for the reasons above.

Depending on how crypto friendly the country is the steps to take can range from trivial to making your life a hell. Just look at the US IRS, requiring people to declare tax on every crypto transaction.