I don't think so, if they lost due to KYC, why are the others with the same KYC flourishing in the business?
Which services which demand KYC are flourishing? In terms of centralized exchanges we've seen dozens collapse with insolvency, bankruptcy, or outright scams over the last few months, and those which haven't collapsed laying off huge chunks of their employees. And in terms of fake peer-to-peer exchanges which demand KYC, we've seen LBC shutdown and Paxful volume falling.
If you want to actually trade peer-to-peer, then you can use an exchange like Bisq which gives you complete privacy and complete security over your coins, does not require any KYC, and does not require you to deposit any money to a centralized wallet. I see no reason to use something like LBCs which provides you with zero privacy, zero security, frozen accounts, seized coins, and leaked/shared/sold data.
Binance is one company that still flourishes after the KYC, even the gateio exchange is facing downside too and laying off employees, but the KYC rule increased the rate of hacking on the cryptocurrency market. Looking at the high rate of data marketing or even same KYC rule. Hackers and money launderers would invest a lot on using other people's documents to sign up on different sites that requires KYC. The last hack on FTX, what happened to people's documents and files? These are the risks involved in KYC why most people had to move away from a very promising trading venture like localbitcoin. I could remember how long it took me to get an account approved on localbitcoin 2 years ago. These flaws are not conducive anymore especially for traders that saw LB as an intermediary between traders and buyers. What's the essence of KYC for such a platform? I think the best p2p is p2p trading. Working with a trusted trader directly on social media or any other platform.
I agree with most of what you expressed here, and it has affirmed my view that KYC is not the reason why crypto businesses are dying like some would let you believe. If anyone looks around, if a customer leaves a KYC-demanding establishment, there is a very higher tendency that such is moving to another one that would demand the same, but with a better service.
I've done that many times, and in this present dispensation, no one can tell me that a decentralized operation has more customers and volumes than the centralised one that demands KYC. This is obvious, and thank you for mentioning Binance, that's one of the crypto-related companies that are demanding it and is doing well. What about casinos to say the least?
However, it would be wrong to depend on social media for your P2P, this is one of the reasons why many people are easily swindled.