For security reasons, many exchanges currently require KYC, of course this is good because to ensure that users are real and if a problem occurs it is easier to solve, but I don't like KYC because I think exchanges that require KYC are different from the concept of anonymous cryptocurrencies, and this is what makes me prefer trading on exchanges that do not require KYC and 2 exchanges that I think are good are MEXC and Kucoin.
It is not because of security reasons but because the authorities/ government want it that way. To provide any party with your KYC-Data is dangerous.
KYC and anonymous cryptocurrencies never fits together and if someone really wants to be anonymous in the internet, it takes a lot more than just not performing KYC to another party.
Why KYC is extremely dangerous – and useless is a very goog thread to understand the dangers.
Though i think it have it advantage and disadvantage as well, The main aim of conducting KYC is to verify the identity of customer and additionally examining the probabilities of any illegal wrongdoings. It helps in preventing criminal activities and makes sure that all monetary transactions are legitimate and transparent.
Providing such information is also dangerous and makes one susceptible to scam.