I don't think KYC or similar attempts to deanonymize users are necessary as it will likely make many legitimate users stop using it.
Kyc shouldn't make anyone stop using BTC because you can use BTC without data farms collecting your data. Recommended self custody and open source wallets don't need your data, and if you want to trade your BTC, you'll have to use decentraized exchanges or use in person trade. It comes with its trade-offs of low liquidy and maybe less 'convenient' for some people, but the advantage of privacy and security outweighs these trade-offs.
