One of strongest arguments for crypto is libertarian-dream idea of a store of value beyond govt seizure. But you need an onramp/offramp to convert to fiat, like Coinbase. Coinbase needs a relationship w a bank to offer that capability, & banks insist on KYC/AML to bank exchanges.

If you want to evade KYC/AML etc, you have to trade on dodgy unbanked crypto exchanges without such onramps/offramps (i.e. you can only trade crypto for other crypto). But you can't convert your crypto to fiat. And if you can't convert it to fiat, you can't access it/spend it.

KYC performed by banked crypto exchanges will link all your personal identification details to the public key, so authorities know exactly who owns the coins. And if they know that, they can in fact seize the coins via court order. They can regulate & require exchanges to comply.

The other thing that will happen is that regulators will likely eventually disallow banked, regulated exchanges, to import crypto across & trade crypto originating from unbanked, unregulated exchanges. When this happens, you won't ever be able to get your money out. Will be gone.