To me remain anonymous is mandatory because of crypto regulations in my country.
I don't mind giving my email n I'd to binance for kyc.
These two opinions are mutually exclusive. As soon as you complete KYC, you are no longer anonymous.
Since I trust them that it won't go in bad hands.
Your trust is misplaced, since Binance (and companies they own such as CoinMarketCap) have been hacked on multiple occasions for user information.
meaning he has admitted to a crime of laundering.
Mixing coins does not mean you are money laundering, nor is mixing coins a crime (unless there is some UK law of which I am unaware).
What is the purpose of having BTC instead of XMR in the first place?
If we ever reach a stage where BTC is globally adopted, then governments will likely only permit its use precisely because it is an open ledger, despite some users taking steps to obfuscate their transaction and history. No government would ever accept widespread use of a completely untraceable coin like XMR.