I still can't wrap my mind around why people wouldn't want to have compliance with AML and KYC to better help that this doesn't happen
You really think that the fraud is happening because of lack of AML and KYC, if that is the case you are mistaken, these compliance is for legit businesses and the fraud ICO and the hacks that happened in multiple exchanges are the root cause for these losses and it has nothing to do with other factors regarding strict compliance of KYC, so do not mix these things up.