KYC is bad in many ways. Look at how Gemini lost a huge database to hacker. And regarding the data sell, it's very much possible. It's not a myth of course.
Yes KYC is bad in many ways but we all should admit that at some point it can be useful to players who's account got breached and regarding the data sell, yes I think most people are aware that they are selling it that's why sometimes you get random gambling promotion from unknown companies.
I think we're all aware that even the owner of Facebook Mark zuckerberg do sold facebook users data for money.