That's crazy they wont take "I bought bitcoin back when it was around 20k and held onto it for years" approach! What are the probably many other people who still have bitcoin from 2013 and so on when it was only a few thousand but they bought from one of the plentiful non KYC exchanges?
So is it if you just show up with 1 mil out of no where? Or is it so long as they can see that the bitcoin has sat in a wallet for a long time but is just not connected to a paper trail, would that matter?
Either way, something tells me the totalitarian states of America is not the place to be when you want to cash out.
If you got your Bitcoins in 2013 and they are in the same direction today, you are in a good position, or you moved them but the transactions are clear and you can sign messages from the addresses. The only thing is that if you can't prove the purchase price, you will most likely be charged a 0 purchase cost, which won't make much difference with the real purchase price, since almost everything is profit.
If you moved the Bitcoins by mixers for "privacy" I think you have it more complicated as the IRS does not like privacy.
Yeah they hate privacy for sure... but there is no law against making your coins private. Say swapping to xmr and back. So I dont get what they can do from a criminal law standpoint, they need evidence you did something wrong right? If they have nothing because it's just bitcoin that showed up some time ago from an xmr swap, it's just a new fresh bitcoin, and if it sat for years and suddenly goes to an exchange. Like they can suspect maybe you did something wrong but what can they do about it unless they crack xmr itself?
The only thing i can think of is maybe them wondering if you paid taxes on the swap when you swapped from xmr to bitcoin but guess what, you only have to report anything if you made a profit. no cap gains taxes on losses. So just convert during a bear market.
Are there any known cases of anyone getting in legal issues from crypto because they kept their coins private?