And ripe for scams due to the Id holder just contacting the exchange and claiming that you hacked the account after you transferred money/BTC into it.
The real id holder would not contact the exchanger because he wouldn't even know his id was used to open an account with his identity. You could also use a fake id with a none existing person to get an account verfied. Also in the above mentioned scenario the exchanger has no clue because he already verified the id and labeled the account verified.
With such an account a scammer could move&launder much more money in shorter time(in whatever currency) without appearing suspiscious because it's a verified user.
What I mean by Id holder is the person that made the accounts with the Id, so that doesn't have to be the person who is on the Id.
A non-existing person would be tricky, they ask for the Id in order to comply with certain banking laws and regulations, it would seem apparent that they would actually have to check whether the Id/person actually exists. If not, they have to report it and folks would get the police/interpol on their behind for id theft/fraud.
Why risk it that someone else knows what you did with the 'stolen' Id? There's already a black market for stolen Ids, get one, use it to create the account, no third party to do nasty things with that account.
Now, I don't aprove of those thing AT ALL, but I find them interesting from a fictional perspective (actually make a smart/accurate bad guy for scifi or near-future story/rpg).
