Any chance their "verification" is just simply to validate active accounts? If the account doesnt get verified after a period of time, they re-claim/re-distribute any funds to cover losses?
I think there's a good chance this is why verification would be enforced. But that doesn't address the fundamental problem: who wants to send their ID to this exchange now and be linked to funds that the US government considers to be illicit proceeds? KYC in this situation raises the odds of a honeypot by a good percentage, too.