It can still be a violation of privacy even if its how things work. The thing is, most users aren't money laundering or have any malicious intent at all. However, we are branded the same, and therefore must follow the same requirements of everyone.

While I do acknowledge that companies are required to do this to operate lawfully, I do still think its a violation of peoples privacy. In fact, by introducing KYC you are likely making those that intend to money launder use other platforms which aren't requiring KYC. Which means, the only people that are getting their privacy violated, are those that aren't intending on misusing the exchange.