This overlooks two critical points. First, the Financial Crimes Enforcement Network (FINCEN) will use all legal means to stop money laundering which Shapeshift is clearly facilitating. Second, existing FINCEN regulation makes it quite clear that Shapeshift is indeed still subject to KYC requirements.
The Bank Secrecy Act clearly states that "Asset Management is the business of providing financial products or services to a customer for a fee or commission." Since, according to CoinDesk, CEO Voorhees said that "ShapeShift receives a portion of trading fees that each DEX charges in return for directing traffic to the DEX" (i.e. a commission), Shapeshift is clearly still classified as an asset manager. And, as FINCEN's Customer Due Diligence (CDD) Final Rule extends the Banking Secrecy Act to virtually all financial services companies, Shapeshift is clearly still subject to KYC requirements.
Now, it is going to become very interesting when someone anonymously puts a smart contract on the public Ethereum network that does exactly what Shapeshift is doing (assuming that it hasn't been done already and I'm not aware of it) -- particularly if it doesn't collect any fees or commissions. This will give FINCEN two major difficulties. First, there is really no way in which to stop this. And, second, there is no legal structure to prosecute it (not to mention no identifiable entity to prosecute).
Decentralized Finance (DeFi) is already an unstoppable wave. While I'm surprised that FINCEN hasn't gone after middlemen like UniSwap (yet), I'm fully expecting that an entirely decentralized exchange will appear shortly (again, assuming that it hasn't already and I'm simply not aware of it). Short of making the anonymous usage of cryptocurrency illegal, I'm not sure how money laundering can be reined in -- yet governments will feel compelled to do so. The $24 trillion question is -- how far will they attempt to go to do so?