You have good reason to be paranoid about sending your crypto and KYC data to centralized exchanges.  Who knows what could happen to those precious funds once they leave your wallet? But heres the thing: keeping everything locked up tight in cold storage may ease your mind, but it doesnt help you actually use your assets. 

The way I see it, youve gotta strike a balance between security and practicality.  Do your research find an exchange you are reasonably confident in, and only keep what you need for trading on there.  The rest can stay tucked away off the grid if it makes you feel better. 

Will there always be some risk in trusting third parties? Unfortunately, yeah and  thats the price we pay for convenience.  But a few common sense precautions go a long way.  Spread things around so all your eggs arent in one basket.  Use strong unique passwords.  Set up 2FA.  And never send more than you can afford to lose access to for a while.

But dont let your fear paralyze you. Take reasonable steps to watch your back.  You dont have to go full tinfoil hat, but a healthy skepticism will serve you well.  With so much potential in this space, it would be a darn shame to miss out because you let anxiety keep you from dipping a toe in the water.