alt Hacker NewsThat's not how the law works in the US. The government cannot have a third party take action on its behalf to do something that would be illegal for the government to do itself. This is why the Biden administration had a restraining order filed against it, on account of them pressuring social media companies to ban content it didn't like. This violated the First Amendment, despite the fact that it was a third party that was doing the actual banning at the behest of the government.
The government could legally create its own facial recognition technology if it wanted to. They're not avoiding the law, facial recognition isn't illegal.
That's pretty much how KYC works. The government can't just willy nilly demand papers of everyone going into the bank to open up an account due to the 4th amendment. So they just make the bank do it so it is a "private" act, and then for instance IRS is authorized to do warrantless seizure on the accounts which are now tied to names that were forced to be revealed under KYC laws.