At this point I don't think STEEM nor any crypto is really their priority to try and regulate, the whole terrorism bit is a load of shit. There were terrorists before 2008 and they were doing just fine getting money from various sources. We all know HSBC and other banks launder money for this shit and government money has funded just about every war.
Seriously what benefit would crypto have with people trying to do arms deals, if they hate or not care crypto so much how hard would it be get deals done in this asset.
As for KYC and AML that should be handled by oracles and the data can be tokenised with an NFT which would give you the best of both. So you can verify yourself without revealing your actual data