Interesting notion that privacy-conscious persons enjoy a "higher quality of life". Bitcoin is based on decentralized trust and confidentiality. Quality of life isnt always clear and varies by person. Privacy-lovers may prioritize their belongings and safety. KYC means "Know isnt always evil. It can prevent fraud and theft on a reliable cryptocurrency market. Think carefully about where and why you share private data. You cant avoid KYC; just trust the correct sites. Everyone has the right to privacy in Bitcoin.
KYC can't prevent from fraud or theft, let's say I'm a hacker and I get your personal information, I will create an account in a centralized site using your personal information to receive the money that come from the site I've hack before. Now if the centralized exchange report my account to authority, which one will get jailed? you or me? remember I use your KYC in my account and I had never write any single information related to myself.
KYC cannot completely prevent money laundering or fraud. If your account receives money from addresses that are considered stolen, after receiving notice they will lock your assets or you will even be questioned by the police immediately afterwards. Just like many airdrop participants, one person can use 1000 wallets and KYC will minimize the damage to the project and be more fair to real participants. KYC is very effective in preventing fraud and money laundering. If KYC has no effect, why do criminals prefer to use decentralized exchanges rather than centralized exchanges?