I have heard about gambling sites seized people's money when they are gambling from restricted countries but have you experienced this on any exchanges?
Happened to me many times but just as you, they're not forcing me to do it as it requires some verification of where the funds came. I didn't fill out any of what they're asking for including the IDs because my thought is that I've already provided them some identifications and what's more they need about it? Funds can come from everywhere and it's easy to say that it came from my long term holding and I happen to sell it in some exchanges and transferred it to them for another trade.