KYC back in 3 years ago use to be a significatly part of every new project that come throught, either that be Ethereum network or any other. That was the way when people find out in 99% of case that project is not scam. Now to me bad decision is that project developers get away from KYC in future.
You are talking about ICO trend way back when shitcoins where everywhere doing initial coin offering only to later run off with investors money.
The reason why KYC features were adopted back then was because of US investors concerned, their government forbid it's citizens back then from involvement with crypto due to the risen scams so they have to conduct this kyc to be able to identify each individual and their place of residence before token can be sold to them but that doesnt reduce the global crypto scams that was going on at that time.
I don't like KYC in general, they are not useful as they think, if it's was that usefuln so many scams that are going in crypto would have stop by now but it's still the same thing and some kyc platforms abuse this privileged, they sell people information for money that are been used for dark web activities.
Well, in my very personal opinion, I never agree with the KYC, first because it is a way of revealing our data for any platform, and I find that I don't like it, secondly in the ICOs less, that is something that should never be allowed, For example, I could say that things can be very different when different ways of treating things are done, for example in everything that is known about Bitcoin and crypto, or KYC must exist, because precisely, that is what crypto is for, that is what inventory, the greatest of all Satoshi's achievements was to Avoid that , but what happened? Simply put, governments realized that they couldn't do anything about crypto technology and began to do their diplomatic intimidation, and thus KYC was born.
Governments are interested in knowing the KYC because they want to have information about all those who have done and deal with crypto and then charge them a good tax, in itself that is what it is for , to take a slice of that money.