This is funny. What it might do is separate the professional traders from the traders who trade on small volume hehe. I reckon professional traders give their KYC documents without any problem because it is only part of the job. It is the entitled people who trade on small volume who complain and also maybe some money launderers hehehe.
However, the real problem here is Bitmex competent enough to secure the data? They have leaked usernames and emails before.
I wouldn't count out the non-professionals like yours truly, I actually don't mind doing KYC at all -- but only at a platform I believe I will use long term (and that actually helps me with revenue reporting which, I'm a nice guy, I want to do to avoid any problems down the road). I have to sell regularly and predictably, and would like some protections, so yeah, I KYC'd right up at the main Europe exchange I use, as soon as it became available to me.
Is any exchange competent enough to secure the data? If they use 3rd party KYC providers like most exchanges I know do, then they've derisked this bit and left it to that 3rd party provider.