He hasn't spent anything. Do any countries have taxes on assets instead of income?

This is what property tax is, right?

I meant assets like crypto, stocks, etc

In The Netherlands normal savings (retirement/pension savings are taxed once you retire), stocks, crypto ...etc are all taxed to everyone except Dutch Royal Family.

Yes, several countries have a so-called wealth tax, in addition to income tax.

"Do any countries have taxes on assets instead of income?"

Not applicable to this situation, but zakat in Islamic countries requires a 2.5% payment to the government, similar to a tithe. This is why many of the theocratic Islamic countries have 0% income tax. It's always applied to assets above a certain amount, but some places apply it on income as well.

https://en.wikipedia.org/wiki/List_of_countries_by_tax_rates

But the joke is that you can't run from taxes. If there's that much money floating around in one person's wallet, someone will figure out how to tax it. If it doesn't get taxed, well, someone will figure out how to rob him.

You may have shone a light on the real point, here.

For as long as they're not taxed, robbed, or otherwise, people will continue to take confidence in the security of the protocol.

how do u report a digital wallet theft? are their cyber cops in cyber space

You can report cyber crimes to cops in your country

yes, in Italy for example you pay 0.2% annually on whatever you hold (stock, bonds, cryptos, etc) even if you sell nothing or they depreciate compared to the year before