No centralized exchange today that is not asking for verification ID. This KYC had been implemented since 2017, I'm surprise paxful only did it today on you.
I also have a token that I earn through a campaign that I can't do anything but comply with the KYC policy or else I wouldn't be able to do anything on my account. Every time I login it reminds me of the KYC that I need to fill.
Binance has no KYC for withdrawals of up to 2 BTC/day and Poloniex allows for no-KYC account for withdrawals of up to $10k/day. Of course, 'random' account freezes are still possible.
It might be annoying but it's just part of the cryptosphere now and if you want bitcoin to become mainstream then things like this are inevitable like it or not. There are pros and cons to it though. Would you want someone who isn't you to be able to withdraw your coins? At least it's another layer of security in that regard but if you're not comfortable with this sort of verification I would look for other exchanges that don't require them.
What's the difference between someone stealing from an unverified account and someone stealing from a KYC-verified account?