| It is already the taxpayer’s responsibility to report their capital gains. The IRS has issued "John Doe" summons to Coinbase in 2016 [1] and Kraken in 2021 [2]. They also already gave warnings to 10,000 US tax payers, in 2019, that they thought did not pay their fair share of crypto taxes [3]. They are working with plenty of information already. Anyone who chooses to omit capital gains from crypto may also see consequences in the future. Most blockchains are immutable public ledgers. The auditing of this technology will only get more advanced over time. To your point about depositing, how does the exchange know the original price that the crypto deposited was purchased at, when it could’ve been purchased elsewhere (including a different centralized exchange like Coinbase, Kraken, KuCoin or Binance, or a decentralized exchange like Uniswap), or perhaps it was mined, or perhaps it was from a fork of another coin (with the current US tax laws, the cost basis is zero from a fork). It’s not as simple as you are making it sound when the source of the crypto is unknown. How would formal verification actually work for a single exchange to calculate cost basis, i.e. the gain or loss, considering all these different cases? The people making these laws do not actually know in practice how these things would be enforced by the exchanges. They are trying to fit old securities laws into a new technology. Just saying that's it's too complicated is not the right answer. I think laws should be adjusted to accommodate for new innovations. I also think people should pay their taxes and crypto should not be used as a method of tax avoidance. [1] https://www.justice.gov/opa/pr/court-authorizes-service-john... [2] https://www.justice.gov/opa/pr/court-authorizes-service-john... [3] https://www.cnbc.com/2019/07/26/irs-is-warning-thousands-of-... |