Why does the exchange really need your data
To fulfill the regulations requirement.
what do they do with it
Don't know, the worst is they sell the data.
who actually gets to see it? These are important questions to ask for anyone using a crypto exchange today.
Many entities, from the workers who work in that exchanges, third parties who cooperate with the exchanges to government.
People simply don't care with privacy and their personal information because they care more about the money. if they use no KYC exchange, they need to pay premium, extra fees and spend more time (time is money), so centralized exchanges are their best option.