The reason Monero's got strength in privacy's because XMR doesn't connect funds so if ppl used XMR from centralised exchanges they'd lose anonymity. It isn't recommended to swap there but if Monero stays on decentralised exchanges it's going to be swapped. If bitcoin can't become a privacy coin ppl will use Monero.
If they regulated XMR they wouldn't be able to decrypt it so the most they'll achieve is ban it from regulated exchanges.
Most scam centralized exchanges delisted monero years ago, and no one who actually uses monero for its anonymity is buying it on a centralized exchange anyway. Monero has been thriving on DEXs and P2P trades for years, and will continue to do so.