Profit arises when one sells crypto for fiat money, doesn't it?  This they can't figure out, unless you show them your wallets, sales on exchanges etc.

Another point,  If you just keep crypto on your wallet, it can't be considered a profit, because crypto is not considered to be money by governments, so there is no profit.     Imagine you bought some game tokens for $1, and just keep them. One day these tokens' price increases to $2.    Will tax authorities demand from you to pay $1 difference ?  

Another example - you bought 5 years ago one ounce of gold for $1000, and now it costs $1300.  Do you need to pay taxes just because it's market price increased??