> Most Bitcoin transactions are P2P and hence there is no business/customer relationship and hence there is no KYC law applicable.

That's a bit of a nonsense statement. It's a P2P payment network so you have no way of knowing if most of the transactions going across it are between businesses and customers or person to person. Quite simply that's a claim you can't back up.

KYC laws apply to financial businesses, like those whose sole servers is the transfer of money, i.e. bitcoins. Exchanges for example must comply with KYC laws. Money laundering, aka mixing, is itself a purely financial service. There are no mixing services that are on steady legal ground; they are proving a service that expressly allows one to launder money as such they will always be a target for authorities.