2. **Regulatory Compliance** Verification ensures adherence to essential regulatory standards like anti-money laundering (AML) and Know Your Customer (KYC) requirements. Complying with these regulations not only safeguards investors but also establishes a transparent and secure framework for Bitcoin transactions.
This is the only valid reason to pass KYC. If you want to have your Bitcoin gains turned into some $$ in your bank account, you'd better do it through a regulated exchange that is acceptable to deal with by banks and regulators. Because if you get a large enough sum through p2p trading or cash deposit - it's almost guaranteed that your bank will ask you about the source of your money and demand a proof, because in their eyes it's a high-risk behavior that is typical for illegal businesses or money laundering.