I know some instant exchanges like Changelly or ChangeNow can do that but I am not asking about instant exchanges. I am asking about exchanges like Binance, Bybit and others.
I remember days that I forgot to off my VPN but using it to open Binance, it happened repeatedly and Binance was warning me but after several warnings, they told me to do the third verification which was proof of address or something. But it was not by force because i can withdraw my coins and they gave me deadline. My money was not seized.
Exactly what happened to me on Binance happened to me on MEXC but it was not several times and they also change my account to withdraw only. They did not also seized my coins.
Yes for gambling they do sieze ones funds due to some illegal acts or restrictions based on the country but for an exchanges that you're talking about I've not for once heard that one is being forced to undergo a KYC verification. Though it's a requirement when you tend to take up some tasks but then been warned or forced to do it by a major exchanges is something i can't tell but wonder why it's so.