~snip~
It seems shady but from the exchange point of view, it's a cost issue. It's the same thing with real world banks.
^ Completely right, majority of exchanges now were the same on that strategy. They never inform if you deposit but when you are going to withdraw it need to passed KYC. The first thing that we can do to avoid this possible problem is doing your own research first before you deposit. Ask on telegram group or seeking first the FAQ before you use that trading site because of our own responsibility to manage our own risk to trust exchange sites especially if it is newly launched.