Do not forget that KYC is a way to prevent fraud. No person who has passed KYC will cheat. Another thing is that the casino must provide such conditions that it is impossible to purchase other people's accounts with KYC or pass fake KYC. If casino conducts KYC, then everything should be as honest as possible.
If a person wants to commit fraud and knows in advance that he will commit it, then he will find ways to avoid KYC, if he does not find such ways, then he will go to another casino where KYC is not so hard or there is no KYC at all.
Well, personally, I think KYC really does stop users from committing crimes, most especially, on the casino where they've passed KYC verification, but then also, this does not completely stop people from committing crimes if they have set their minds to doing it, this is because for some countries, it is really not so hard to obtain fake documents requests for KYC verification by the casino, and for some casinos, detecting this fake documents is pretty difficult.
This is me simply saying that KYC verification have indeed helped to reduce the amount of crimes committed online, but it has not completely eradicated it since there are some casinos out there that don't even ask their users to verify their account.
One method to identify criminals in gambling is KYC verification. I also think KYC is needed. Several casinos place special emphasis on KYC especially those who are license based casino. Some casinos give relatively less importance. KYC is not mandatory if no unusual activity is observed. Some casinos have the option of gambling and withdrawing money without KYC. But overall, if all casinos made KYC mandatory, the amount of crime could be reduced significantly.