Or they may declare their gains to IRS. Bitcoin is not just a tax evasion thing :) (and it's actually quite dumb to use it for tax evasion, given how the ledger is public and will always be there)

That's not that easy. It assumes you have tracked your cost basis, for example.

AFAIK it's not illegal to make money off of bitcoin speculation. It's just like selling any other form of property.

In Germany it's tax free if you where holding them for more than one year. A person can also move to another country where they don't care so much.

there are lots of people operating entirely on cryptos around the world right now.

That doesn't mean it isn't a scam. Bernie Madoff's customers were all quite happy for many years.