TLA agencies would have no problem with a cover identity to "prove" who they are. Your average citizen is going to have a hard time buying a slightly used social security number that they can use to get an ID that will pass KYC laws.
I think you misunderstood.
TLAs want people to prove their identities to prevent or collect data on victimless "crimes" like ML or being a customer or vendor of substances outside of the US pharma-DEA cartels' authority.
I don't think that's a good thing, I think criminalising such activity is a way of oppressing the proles on their own tax dime, especially when white collar not-so-victimless crimes are seldom punished, therefore I am against KYC.