KYC is indeed needed to see about the investors that are in it, and it is needed to judge whether the investor is genuine or just a bot and I see the KYC side with that function.
I'm not sure what gave you that impression, but services don't give a shizzle about KYC/AML.... services comply with regulations because they are forced to do so, all because the government wants more control.
For a long time a lot of services were free to use without any type of personal information. BTC-E had a daily withdrawal limit of 100BTC before they were shut down, a limit which they had for several years and it worked just fine.
I miss these old times.... I'm sure that if BTC-E was still up and running and continued with their non KYC service, it would be one heck of a popular exchange today. Government agencies are the real criminals. That's a fact.