KYC is up to the exchange to implement. There's nothing stopping them from keeping additional records that aren't on the Bitcoin blockchain in order to stay com

KYC is up to the exchange to implement. There's nothing stopping them from keeping additional records that aren't on the Bitcoin blockchain in order to stay compliant. Of course there's also nothing stopping you from sending your coins somewhere with reduced reporting and spending them from there, but then there never really was in the first place.