Crypto owners especially who do trading occasionally or regularly in exchanges, everyone is facing two big problems
1. Compromising their privacy because these exchanges will ask your KYC at some point
2. Risking of losing fund from a hack.
3. Risking of exchange selling your personal data (especially if the exchange is located on country with weak data protection regulation)
Don't forget that New Zealand has seen a very serious terrorist attack in 2019 where the terrorist Brenton Tarrant reportedly had used cryptocurrency to buy guns for the attack. So it's no wonder that New Zealand tax authorities are taking the matter seriously!
Valid point, but i doubt it'll help much to prevent terrorist attack unless criminal who uses cryptocurrency are stupid (e.g. use centralized exchange or assume Bitcoin is anonymous)