In a hypothetical example, If i had bought 32 bitcoin and the price went up to $100,000, I would not be able to afford another 400 coins to meet the withdraw requirement. This rule by the exchange is insane.
I don't think it would work that way as 32 BTCs @$100K is simply too high already. When you said "100 coins", what crypto are we talking about exactly?
When someone sends you crypto on your receive address to your exchange, how does the exchange know if these funds are to be taxed or not when they prepare the forums at the end of the year? I can understand if you bought assets and they gained value and then you transferred them to your bank, the capital gains would be taxed. But if you received funds from family, or donations on your receive address, how does the exchange, or IRS know if they are taxable or not as there are no notes with these transfers?
Probably based on what you declare. If they find something sus such as ungodly amount or frequencies of donation and gifts, there's a good chance said person might be investigated.
You have to fill it out in forms, see for instance:
https://koinly.io/blog/irs-crypto-tax-forms-1040-8949/