So far what I know about KYC is the identification system of the exchanger for all its users, here it can be said to provide an opportunity for regulators to find out who the owner of the address is.  However, as far as I know.  Even if you know who the owner of the address is or in the sense of not being anonymous anymore, a system that has been designed to be decentralized cannot change.  The role of the regulator is limited to making regulations and policies for fiat and its financial system.  However Bitcoin and crypto have different systems and are not controlled by one party but all parties who are part of the market.  I feel that the regulator will not be a very fundamental threat but only a challenge to the viability of an innovation, especially in the financial sector.  So, no matter how the government behaves, if the majority of people believe that the innovation is good for them, the government can't do anything.