The original idea of crypto is the decentralized therefore KYC might break its original idea.
However, people has been shouting about how risky the market is, and that's because of lack of regulation.

When we ask for regulation, KYC is already embedded as that is the basic requirement for financial industry accepting clients to facilitate their business.
Therefore we have to follow and do the KYC as we have no choice, now let's weigh the two, and for me I would pick that we should follow the KYC and let the crypto space get regulated as it's the only way that it will grow in the long run.