If we being very sincere with ourselves and logical, the KYC/AML request are a necessity in today world, because of the reasons clearly stated. Its a fact that there is terrorism financing, human trafficking and sex slaves, drug dealing etc. If we are good people at heart, I believe that we would like all these stuff to be stopped or eradicated totally, but now cryptos anonymity has only created a big avenue for these things to thrive.
That being said, I don't like my personal data in hands of millions of random people and companies. Already we are suffering from "targeted adverts" to a phones and email, after webiste have promised not to share our personal data. So yea, I can't really trust the KYC/AML words for it. So I guess is a tough one, "universal gain vs. personal gain". A better world with more transparent dealings or a worse world but you (we) the individuals safe in our own small corner - in the end the chaos will reach your doorstep.
What i'd love the most genius cryptographers to come up with is a system where we keep our anonymity, but we can meet the requirements of these KYC/AML to ensure we are not doing illegal stuff... May The Force BE With Them.
I fully agree with you and my experiences relate. I am also trying to roll out an ICO that will make decentralized ID's possible. So in essence you would only need to perform KYC once, and as soon as all checks are done - your documents and the like are deleted, which means there will be no centralized storage of ID or data. If security is breached - intruders will have access to nothing but the blockchain TXs (elaborated on further below) which is futile as it would already be in the public domain. The onus would rest on you though to ensure that your device (PC/tablet/smartphone) is not vulnerable.
* If your (hypothetical) address is: 1234 Crypto Street, Cryptoville, Cryptania
* Your date of birth (derived from ID/SSN or equivalent) is: 01/01/1980
Any other entity that would require KYC should only know that you are from Cryptoville, Cryptania (street address should not be necessary) and that you are 38 years of age - no "specific" info will be divulged. We would simulanteously check if you are on any PEP/terrorist/other crime related lists and have just an atomic value of Yes or No. Once KYC is successful - we issue a cryptographic identity that can be used any other place where KYC is required as we would "vouch" for the legitimacy of your identity. Even further should an entity need to access your profile - they would need to have undergone KYC in the first place, and then you can either accept/reject the access to your info. These requests will be written to a blockchain so that there is transparency and a proper audit trail. This is the jist of the propsed system - I have omitted the complex cryptography and smart contracts behind the concept.
Hopefully the crypto community will see the value behind this venture and support us so that it can be implemented successfully.