I will NEVER consider a KYC-requiring exchange as long as legit alternatives like BaseFEX are available.
In fact, I don't trust KYC conducted by cryptocurrency exchanges at all. Even Binance was recently hacked and thousands of KYC info including user id, selfie, name, email address, or maybe even physical address are currently being listed for sale on the dark web as we speak.
But almost exchanges now require KYC for users, or you can only withdraw a very limited amount if you do not proceed with KYC. Yes, it'll not problem if you don't trade much.
There are still options that are pretty liquid. BaseFEX doesn't have any KYC process at all as he mentioned. Deribit and Bitmex have no regular KYC process either. It only happens when they flag your account for suspected terms violations, which appears to be rare.
Binance and Kucoin still have their 2 BTC daily withdrawal limit for unverified users too. That's more than $20K allowed per day. I wouldn't call that "a very limited amount." That's more than enough for most traders around here, especially considering that it's wise to spread funds around to multiple exchanges. Having all your eggs in one basket (in case of hack or exit scam) is never wise.
He makes a damn good point about data protection. That's the #1 reason I avoid KYC.