You just follow the rules on how they want their customers to do KYC for them if they want a passport and a selfie with you holding your passport then you just have to give it to them, I think it is one of the effective ways to do KYC, some people are cheating the KYC by submitting other people's passport, and about your questions is it even needed, in my opinion, we don't need that if we are in their bounty campaign, but not if we are their investor.