Bear with me
Let’s say LSPs become money transmitters, fine
They still remain operable with the entire LN
Which still has tremendous sender privacy, etc
So say I’m KYC’ed with ACINQ
I can still (theoretically) share my channel with them to a Fedimint
They would have no way of stopping me from sharing the liquidity
And as an onion routed hop, they should know nothing about where I am sending or receiving money
And they would definitely have no idea who I’m sharing the liquidity with in the mint
Now, if they criminalize running a lightning node altogether, because it’s onion-routed topography bothers them on an ideological level, that’s a different story I guess