The KYC thing is all about control and taking advantage of the masses mostly the legit earners. As you rightly say it does not have much effect on the criminals as they know how to bypass all the rules.
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I do think that that for most governments, they're trying to do the right thing.
But they simply don't, or more likely don't want to understand the tech available and that it's completely passed them by.
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That is true, The Government has a lot of catching up to do.
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