CEX and other custodians hold coins for their customers. Though some are running fractional reserves.

As almost all CEX have already delisted Monero ore are going to do so soon means that all coins are held in self-custodial wallets.

Monero is not advertised as an investment. Although there may be still a couple of OGs left with big stacks it's all self-custodial. So ideally no way for government to extract any further value from it through taxes like with KYC BTC that need to get sold against the corresponding USD value when using it or exchanging for fiat.

Monero has almost zero downside from here. Which ironically makes it a perfect store of value, despite not being a good investment.