2nd question btw. Any idea how many people are buying/selling bitcoin and have not paid taxes? I've heard it's a lot but idk what percentage of the population. Like a lot of people I know who are into bitcoin didn't even know you had to pay taxes on trades. I, like them, thought it was only when you cashed out. I heard the IRS sent a crap ton of people letter reminding them of taxes.
Also, do exchanges like coinbase automatically hand over all your info to the IRS or do they only do it upon request? Like the IRS has to call them to ask for yours in particular?
What about exchanges like foreign exchanges like kraken or kucoin? I hear they are less likely to cooperate with the US gov? Idk. anyone have much info on that?
If they can't prove that you bought/sold crypto, how are they going to tax you or punish you? They can't do neither of those. (At least I hope)
Sooner or later the Governments are going to figure that out and probably force the exchanges to ban anonymous coins.
They can already see everyone who bought and sold anonymous coins on the exchanges like coinbase. The problem rises when people do P2P trades and nobody can see the XMR trades because there isn't a public blockchain. While they can track down the traces on the bitcoin blockchain and find your transactions, they can't do this on XMR. That's why XMR is way more dangerous than BTC. (to the govs ofc)
They wont if they dont know what you own. The issue is when you want to cash out or buy something big. They'll ask "Where did you get this from?"
You can say I bought the bitcoin at 50k but if you cant prove it, I assume they'll treat it as if you bought it for 0 dollars.
Although, I do wonder how gifts, or even better, art works? Like ... idk.
The biggest fear is them not believing that you saved up a ton of money to buy it when you did. "I used my literal life savings"
Idk.
As far as the block chain goes. I think the blockchain trail ends when its converted to XMR, from my understanding, the only thing they can do is try to find where a new btc entity from XMR came from. So if like .74 btc vanished into XMR, trying to see if .74 or .73 shortly later "appeared" out of XMR. But afaik it's only speculative and there is no solid proof that was "you" who did that. They can only at best, if they found that, guess it might be you. But it could be anyone. This is why they hate privacy coins and want KYC for everything.