What happens if you don't comply with KYC?

I'm curious to know, what are the potential consequences if an individual fails to comply with the Know Your Customer (KYC) requirements in the cryptocurrency and finance industry? Could you elaborate on the potential penalties or restrictions that might be imposed on those who do not adhere to these regulations? It's important to understand the significance of KYC and the role it plays in maintaining security and preventing illicit activities within the industry.