How funny, imagine I do not trust even my Bank and my government to have all my KYC data. I feel that way too, because anytime I sent my documents to a new service I know that at some point in time they will get hacked and our data could be sold for pennies on the Dark Web.
So when you expose your data is not about if that happens, but when that happens.
Always have that kind of doubt anytime you do submit out your personal details on a typical normal day where government or any service do ask out some documents about your identity.
As if we do have some other options to take? because if we don't comply then don't expect that you would really be getting on what you wanted. Even just purchasing a car or a property
you would really be needing those documents which would fully be exposing your all information. When it comes to those info then it is already be long time leaked out.