If not DEX, then I think there is no way we can completely eradicate the issue of fraud from CEX except if they are in total compliance to government authorities.
It's impossible to completely eradicate fraudalent transactions because there is no system that accurately filters such transactions.
People have also been bypassing the KYC imposed by exchanges for years -- buying and selling of verified accounts are rampant. It'd be interesting how things would change with AI/deepfake tech rapidly improving. Faking documents has existed for decades but AI tech is expected to provide more accuracy with far less effort needed and probably will be more accessible to average people.