Will you send your docs in KYC case?
Im not really into it as crypto is supposed to be not like that but we have no choice but to deal on that especially in an exchange where you always used their services or in a platform where you do your regular trading activity. of course only on reputable ones.
Im not afraid though on identity theft. Besides our personal infos is not that private generally if you know what I mean.
Do you think that it really helps to find illegal activities?
Generally yes. It can be a help and can served as one of a tool to traced something.