The FixedFloat hack was almost comical. As far as I remember, it happened monthly. Multiple times and each time in the same way.
Otherwise, they have been known to keep funds without any strong basis, this is nothing new, even if they have publicly acknowledged such a stance.
I don't know who can take fixdfloat exchange seriously when they got hacked several times.
If they can't keep funds safe and secure their website and assets, they can't be trusted about anything.
Same could be said for Bybit and other centralized exchanges... but things are reversed in this clown world.
This will force some people to use KYC, while others will avoid those services. Chances are you'll end up with different wallets: one for privacy, and one for KYC services that's completely unrelated to the other wallet.
The notion of Taint has been an attack on Bitcoin's fungibility for years.
I can see this issue escalating in future.
Maybe best solution would be adding some privacy layer on bitcoin or mweb addresses.