What confuses me is that the huge number of transactions and users, an average of more than 10k-500k transactions, is not considered a small number for such services. I thought that the average of its transactions was a few hundred transactions.
I'll take that with a grain of salt since:
Quote
It is alleged that one of the seized cryptocurrency exchanges, Xchange.cash, had been active since 2012, facilitating nearly 1.3 million transactions for 410,000 users.
Yeah, all fine and credible, except for the thing that the .cash tld domain was available only from 2014, so.... 
I’ve used several of these exchangers listed on BestChange, and they’re practically impossible to use for money laundering. For every suspicious transaction, they ask for documentation. They use chain analytics tools and even block transactions from gambling platforms. Just look at the complaints from hundreds of users who are upset about sudden KYC on BestChange! Once, I had to go through KYC and send screenshots when I tried to exchange LTC that I withdrew from DuckDice!
You're mistaken real AML/KYC policies with demand from those exchanges in attempts to confiscate your funds, I remember how one such moron was denying a customer his funds because the address was tagged, that address was in fact crypto.com hot wallet!