Is KYC mandatory?

As someone interested in navigating the world of cryptocurrency and finance, I've often come across the term 'KYC' and have questions about its significance. Could you please clarify whether KYC, or Know Your Customer, is indeed mandatory in the realm of cryptocurrency transactions and financial services? I'm particularly interested in understanding the reasons behind its requirement, if any, and how it affects both individuals and businesses operating within this space. Additionally, I'd like to know if there are any exceptions to this rule or circumstances where KYC might not be necessary.