From what i have understood from the whole law suit situation and fine that have been slammed on centralized cryptocurrency exchange is that, for some reason the government is right, because these exchanges are operating as licensed exchanges reason why the collect KYC from their users how then will their not remit their taxes to the government when the time for that is due,
KuCoin does not have a license to operate in the United States. They have a international license from the Seychelles, and for a while they have been operating under it. at first they were not strict because it is small and it works in trading cryptocurrencies, not cash. they allow withdrawals under the money laundering limits, which are often 10k dollars, but I think that the mistake they made is that they did not ban members from the United States, so if they wanted to comply, they had to either obtain a license or leave the US market and pay the fine or settle.