The main problems with this exchange have to do with the fact that they are not accountable to anybody for anything. They aren't a registered business, they don't have any sort of licensing, and nobody knows where the owners or operators are located.

They started demanding KYC from all users after their company was dissolved, which is beyond weird. If they're not a real company, why do they need KYC? They aren't reporting to any government, they're not paying taxes; they're just a rogue operation who depend on either the loyalty of their user base (rapidly dissipating) or the naivete of new users to keep them going.

TradeSatoshi is down to $46k in trading volume per 24 hours; at a 0.1% fee this means they are only making $46 per day on trading fees. As huge withdrawal fees wasn't working in their favor, I believe they had to resort to the sudden KYC-for-everybody manuver as means to generate additional revenue. Plus, as I mentioned before, reputable exchanges don't use this as an excuse to with-hold customer funds and block them out of their accounts, even if it says they could according to their terms and conditions.

Its just bad business all the way around and potential users need to be warned about their practices.