After all, there was an entry here that KYC makes no sense at all and even helps criminals to act at the expense of innocent victims. This is all one big absurdity!
Firstly, I believe this is not the first time paxful will ask their user to go through some KYC before he/she can access his/her fund and if you search through this forum you will understand that youre the first victim but I believe they usually do that when they notice something fishy account the account or some report the account accordly to their rules/regualtions.
Meanwhile, KYC make no sense within the crypto community but to P2P and centralized exchange site it a real deal. However, KYC help criminals at the expense innocent victim if a data breach occur. I will advise you not to use p2p and centralized exchange you dont trust or understand their rules and regulations in future.