There are some laws that are just made for certain people and not entirely for all, as we know hackers don’t even care about KYC. If they want to launder their hacking proceeds using a KYC-enabled platform, it won’t be in their list; they always have their ways of removing the trace. The idea behind KYC is just a system they want to use to monitor the people; it is not really there to prevent fraud. It's only in rare cases that they have been able to link criminals to their identity through crypto exchanges; if not, it’s more about taxation and others.

A big company will protect the interest of their company, and they will definitely have a software that's dedicated to protect their computers and Internet server's...It's a company that doesn't have the licence or ambition for future existence that will operate without anti-hacking agent's or policy...if company is been hacked, know quite well that personels of the company is involved into such act...it's inner company workers that will review the secret of the company by releasing a vital information to the hackers, before they can have access to penetrate into their database...

Maybe even liveness verification could already bypassed by AI with Seedance 2.0 for example. I've witnessed AI creators on social media demonstrating replacing themselves with a movie characters and it's pretty accurate, if they could do something as sophisticated as that, it's within the possibilities that maybe they could override the cam with the AI edited video and bypass liveness because it's literally real time.

A year ago I saw chinese X accounts bypassing Binance KYC verification for Binance Alpha program. It's entirely possible that hackers, people who know their way around these thing, already find a way to even bypass liveness verification using AI.

You'll be amazed to know how far scammers will go. I've heard the situation is now worse with the advent of AI. It's super easy to create realistic images of a person and even fake ID "via the push of a button". The solution for this? Biometrics. KYC-compliant platforms would ask for a person's biometric data (such as a fingerprint or Iris scan) to confirm validity. There's no way scammers can get through this. Unless they cut off someone else's finger or take out someone else's eyes (extreme-case scenario).

The problem of KYC is that data is stored on a centralized server. Spreading it across multiple servers (distributed) would prevent the data falling into the wrong hands. Zero-Knowledge proofs would be a big help. I'm sure crypto exchanges and companies will think of something. It's their business, anyways.

To be honest, Artificial Intelligence (AI) is becoming increasingly risky; it can easily generate exact replicas of people's photos and signatures, or even extract sensitive information. Many major companies now prefer using AI to handle their accounts and data. However, the mistake they make is that their data remains stored within the system, making it an easy target for hackers. Some people have become so trusting of AI that they do not hesitate to share screenshots and confidential information when troubleshooting account issues. While AI certainly offers benefits, I believe the potential for harm currently outweighs the advantages. We need to be more cautious and should not rely on AI to solve every problem we encounter. As the OP mentioned, the number of hackers is steadily rising. However, if an investor remains vigilant and conducts thorough due diligence in all their activities, they can avoid these issues and keep their investments risk-free.