Does that mean that if one participates in an ICO and puts in over $3,000, that gets reported to the government?
Once you join and ICO with a KYC it will be reported to the government,i think they pass all the participant after the ICO,i dont know about the law but some countries are banning its citizen from joining ICO.
Or if you move $3,000 out of an exchange, that gets reported?
Weather you move your funds or not once you join the ICO the government has the info on your transaction, this is their way of tracking their citizen who can potentially be evading taxes.
Yes, it is because we need to follow tge rules that the government sets for the advantages of the economics and community. The transaction period even where the money goes by, that is the work of the government run for the funds so that they can sustain also to those in needs individual or group of organization.