There are ways for those people to cash out without filling any KYC procedures like passport identification.
For example trading them for cash face to face under spot value to find buyers fast, in a location with no CC cameras.
They could also use btc mixers to obfuscate the coins.
In short, that money is permanently lost unless the thieves are exceptionally stupid and try to cash in at legal traders.
Where do you find these people with a suitcase full of cash? Can you trust them not to rob you?
Easy to say you could do that, but in reality you will end up rekt in 9/10 cases.