KYC forms protect both tokenholders and founders. Tokenholders are protected by having their founders know what tokenholding best suit their personal situations. Founders are protected by knowing what they can and cannot include in their tokenholder's portfolio.
KYC Disapprovals:1) USA/China/Singapore nationals;2) Insufficient KYC documents;3) In case of unqualified account (Ex: illegal money laundering, terrorism related funds, etc.).
Read more: Know Your Client (KYC) https://en.wikipedia.org/wiki/Know_your_customer