Yes, it is true that traders need to verify KYC before trading with crypto exchanges. And it is a mandatory step implemented by most of the crypto exchanges. I think safety is the concern here. With these centralised exchanges, your bitcoins are somewhat protected and less prone to attacks and scams.
Attacks and scams is your least concern when you are pertaining for KYC requirements from exchange. This is strictly implemented so that Exchange can trace you in case you deposit money from illegal transaction. Same scenario when the time hacker of a Dapps exploit the pool funds and hacker deposit all the hacked money on a centralized exchange which result for revealing his identity and locked the exchange account. Due to many illegal activity in crypto, Regulators imposed KYC on exchange to still regulate it despite crypto being decentralized in a sense.