But that's not the problem. In some countries, citizens are required to declare their wallets to the tax office. If the wallet is declared and the coins are stolen, you must definitely write a statement to the police in order to submit the correct tax return.
Okay, that is a valid point to report to the authorities. My point is that nobody should be using any kyc self custodial wallet, it is risky enough to submit kyc in custodial and centralized platforms.
I have said this many times myself, but unfortunately you need to be a good specialist to be able to trade decentralized and not use centralized dumps. Of my friends, everyone uses centralized services. I tried to teach some, but they do not understand that they can easily lose coins if they suddenly sign a permit from a scammer.