Being a centralized blockchain developed and controlled by one company it seems to me Liquid will have to implement KYC/AML of some kind. With everything centralized and not P2P all the bitcoin <---> Liquid conversions will be an easy target for government regulations. If it doesn't already have it implemented then Blockstream will surely be forced to implement KYC/AML on Liquid or be subject to heavy fines. Yes AML covers crypto not just fiat. Anywhere there is a 3rd party involved.