Showing your face has absolutely nothing to do with owning a Bitcoin wallet (address). They know that, we know that, regulators should also know it. So why are they asking for this?
They want to confirm that you are the one saying it is yours.
If something goes wrong with that address , you declared ownership so they can go after you and your funds.
Maybe...
The good thing is, if you stop using them now, you don't have to comply with this rule.
Again, this is a very sensitive matter, because I don't want to sound like I am in favour of tax evasion.
But there is no good reason for them to ask something like this, so that's why I find it ridiculous.