You make a good point but I'll raise you one more.

Does KYC actually stop the criminals at all? Perhaps the criminals are not stupid and they still manage to flow their funds around regardless of KYC.

I found this chart on illustrate my point. I don't even know how you can measure such a thing because by definition, these criminals are trying to hide. But even if the chart isn't accurate the point still stands. If KYC isn't actually lowering crime it's doing more harm than good.

And even if KYC was lowering crime it's still targeting the wrong problem. Holding and transferring money is not illegal. Selling drugs might be illegal but that's because of the drugs, not the money.