In India, not at a large scale, but kyc along with existing crypto exchanges for ex. WazirX is helping govt to keep an eye on flowing money from bank accounts. Because of KYC I have seen that cases are being registered related to crypto scams.

You can take this post as satire, but with the post I want to give my readers that existing solutions like KYC are still present although it's pretty meaningless when it's come to international crypto exchanges but here in India I can see the effectiveness of it when Govt sits in between exchange and user.

Secondly when someone speaks about regulations policies , it can't be done based on transaction ID or hash, one needs demographic data. To me KYC stands as the first point of reference for such data. Although India did a blanket ban in the past, but 2-way KYC i.e. with banks and exchanges are keeping the hopes of crypto regulations alive.