In short: KYC doesn’t protect users, it exposes them. It doesn’t stop fraud or collapses, it just creates mass databases of sensitive information that inevitably get abused. Calling the absence of KYC a “red flag” is the exact opposite of reality - in crypto, it’s actually a sign that the platform still respects user freedom and security.
That's true. The platforms just becomes a honey pot. The average citizen shoulders the risk.
Meanwhile it doesn't stop bad actors from using them for illicit activities as they usually just buy verified accounts off the black market lol. I heard the price depends on how high is the quality of the account. There are accounts that are tied with a real life person in case account gets flagged if someone wants high quality.
Quote from a known sleuth in the space:
You must not be aware of how easy it is to purchase a KYC’d account online then for any service you want.
99.99999% of sophisticated threat actors do this.
KYC does not prove who the person is.
I remember also reading articles about this years ago in coindesk/cointelegraph. Thing has been going on for years, and probably has become more popular with crypto booming.