True. But there are good reasons why KYC rules have been enforced. It's the reason why those rules exist in the first place.
Only thing I can think of would be local bitcoin networks spread all over the world so you can exchange fiat-to-bitcoin and vice versa locally instead of having global large volume DEXes that are beacons to criminals. I guess that's basically what LocalBitcoins was back in the day but I'm pretty sure they closed up shop years ago.
US dollars are used in criminal activity way more than Bitcoin and remember Bitcoin is a public ledger. Because of this Bitcoin is not an ideal choice for criminals. Also ask the question, if Bitcoin is used in crime less than fiat currencies are, why are the powers that be claiming otherwise?
The question is should we take peoples right to privacy and sovereignty away because there are criminals in the world? Find another way to fight crime other than taking peoples freedoms.