Yes, KYC requirements from an exchange can cause us major problems.  Ex:  QuadrigaCX exchange required photo ID, drivers license and bank details to be verified.  Didn't matter that they were the oldest exchange in Canada with the largest user base.  The QCX operators have all their clients KYC data and account balances.  They can only steal the account balances once,  but the KYC data can be resold multiple times.