KYC in itself isn't entirely a bad idea. It does prevent some fraud and adds another layer of security but still depends if the exchange is trustworthy enough. KYC could help retrieve coins sent to wrong address, on exchanges that implements KYC too could use these details to fix some issues. However, even though tax isn't also a bad thing (since it is necessary to have law enforcement and peace and order), I do also disagree on government's hot eyes on cryptocurrencies, especially now that they had seen its potential, it just looks like they just want to profit from these grounds.