Alternatively, a coin-join helps provide anonymity and privacy to legitimate users.

In order for a government to enforce taxation on cryptoassets, they would need to definitively prove that a person owned coins at a specific address. This is basically only possible if coins are bought/sold through an exchange following KYC laws.

"In order for a government to enforce taxation on cryptoassets, they would need to definitively prove that a person owned coins at a specific address." is not really true.

For starters, the government is allowed to simply ask "we think that maybe you might have had some income in the form of cryptoassets. Please provide an exhaustive list of such income" with the understanding that any lies or omision on that answer changes it from "how much do I need to pay tax?" question into a "go-to-jail-for-how-long" tax fraud.

If they find your answer suspicious (for example, it doesn't match some third party info that they have e.g. from a TLA running a honeypot tumbling service, or a honeypot 'trade crypto for cash in a park' op or Tor node monitoring or whatever, all these things are being done by gov't), then this can be followed up by a tax audit (i.e. have you purchased any assets or services that are above your declared income?) and/or a warrant to search your devices (possibly without you knowing) for forensic evidence of your crypto transactions - which might, for example, result in evidence that you used a coin-join service with an intent to circumvent KYC/AML laws, which by itself can be treated as a crime even if they don't find definitive proof that you owned coins at a particular address.

Of course, this all assumes there are no loopholes in the current cryptoasset system. That is, there is no way for the government to go "we found your tax fraud, now you are going to jail for life" – they can't, as long as it doesn't "undermine" the purpose of this inquiry.

> In order for a government to enforce taxation on cryptoassets, they would need to definitively prove that a person owned coins at a specific address. This is basically only possible if coins are bought/sold through an exchange following KYC laws.

It blows me away how flippantly so many cryptocurrency enthusiasts discuss criminal money laundering.

Criminal money laundering?

We're discussing the technicals on what it takes for a government to enforce taxation on a new asset class. There's no conspiracy here, only an attempt at sound understanding.

Did you not realize we talk about topics like how to penetrate computer security, with great specificity, ALL the time here on HN? Does this objective discussion about potential illegal acts blow you away too?

Criminals talking about their crimes really shouldn't blow your mind. It's very common for criminals to get caught because they couldn't keep their mouth shut. Murderers get caught like this all the time, and murder is much more serious than money laundering.

Next you'll be amazed how many high school students discuss trying to not get caught breaking school rules.

Or how many drivers speed.

Right. I've used Bitcoin for a decade, and I've never used an exchange. There is no link between Bitcoin and my meatspace identity. Bitcoin is only for playing online.