For me I see it as a trap, how would they know how much crypto you hold if you wouldn't even give it to them.
It would be hard for them to track every crypto wallet and impossible to know who owns it, if the owner wouldn't provide any proof of ownership, just like how we still couldn't know who created Bitcoin.
It's almost impossible to find someone identity if they hold their coins in wallet and they only trade using no KYC exchanges. But the question is, are you okay to keep holding most of your coins and never cash it out?
You also shouldn't buy lambo, house or something expensive because it would raise a suspicion how can someone buy expensive thing when their taxes are small.