I don't mind withdrawing less than $1k-$5k to prevent KYC because we don't have to verify our account. But for me, as long as the exchange has a good reputation among the others, and they can protect the customer information, I will fill KYC and verify my account. The benefit of doing verification is we can withdraw a big amount of money, and sometimes, they offer some offers to their customer. But if you don't want to submit KYC in any exchange, you can search for the exchange which doesn't apply the KYC.

I think the exchange is not tracing you, as long as you don't make a mistake or use illegal money to trade because the exchange wants to protect their exchange from money laundry.