I have seen evidence of some scams being run under the guise of KYC in order to gain your passport and government issued id's. Be careful out there and remember that a lot of these coins end up being scams. Do you really want them having your passport/photo identification? This is how people fall victim of identity fraud so please think before sending your information in.
I don't think there is a way to avoid this in crypto world.
You find a bounty, making months of signature campaign and at the end they decide to ask a kyc check out of nowhere. If you see at start you would avoid that but because it is at the end, you can't let your months work go to garbage and so you are doing it. And you don't sure they are not going to use it for bad reasons or not.