The Tax Man!
Actually, this KYC is the result of the shady dealings forcing decentralized banking to be more ACCOUNTABLE.
The Tax Man only wants you to pay your 'fair' share when you cash out. This exchange has really taken a beaten over the past few months.
I presume this is their way of maybe even 'striking a deal' to prevent totally tanking.
Let's face it, only a fool thinks decentralized carries any weight when cashing out. I assure you the tax-man knows your dealings, and will collect.
Peace.