Ever since KYC was extended to cover cryptocurrency exchanges, I have given up any faith in that this is solely about regulated currencies, or money laundering at all.
The counterpoint is that if your job was to prevent/punish financial crimes that affect consumers, would it make sense to ignore these exchanges?
Heck, if M:TG cards were the medium, and they could be moved across international borders with a few keystrokes, then surely those would be watched too.
I won't argue that it's not privacy-invading for legitimate customers, but if the legal structure allows it, regulators have an obligation to look where the problems are expected to be.
Your implied comparison of "promotion" vs "monitoring" makes zero sense though.