The problem with KYC on the blockchain is how will they keep privacy? In my opinion no one needs to know how many of what tokens are in your portfolio. They may need to verifythat you are not a terrorist, or on some sanctions list, as I totally get that part but they don't need to know your holdings to know you're safe.

If it can be done privately then there is hope but if not then we will have a caste system in crypto between white and black chains until consensus is reached. Expect a lot of forks.