Because “Know your customer” is the government creating a plausible deniability shield for discriminating against a person or group of people.
It should be the government’s job to prosecute criminals by proving they commit crimes, which allow the accused to defend themselves in court, which hopefully results in less corruption.
With KYC, the intent is to not allow the accused a chance of defending themselves. It is a way to deny people rights without the costly hassle of going to court.
Age/race/gender/ethnicity and other legally defined protected classes are not the only possible instances of discrimination. An example is a person sending money to family in a country where there is less rule of law and they get suspected of terrorism (regardless of firm evidence), or someone selling sex services that gets dropped because a bank does not want to deal with them. Or it could just be errors in the programs and people flagging accounts and transactions.
Electronic money transfer is a vital function of modern life. It should be a constitutionally protected, inalienable right, even for anyone convicted of crimes, just like criminals are still housed and fed.
In an ideal world, would I like to see drugs or sex work decriminalized and legally transacted ?
Yes, but that is not the world we live in , most democratic elected governments have unfortunately not done that. unable to pay/receive for businesses related to them is sadly no different than any other illegal activity.
We don’t remove KYC to make these activities acceptable , we decriminalize them directly, removing KYC allows a lot of other illegitimate things we don’t want as well
Electronic or paper transfer is vital function of legal life, Monetary supply and regulation is core function of a government and it is under no obligation to support illegal activities.
