Hey @aghunter. Super detailed post mate, I think it was the right call to split it into a few parts.
Like you suggested, the large majority of us that are actively trading will not be exempt, particularly if our holdings exceed over $10,000. I think with the interest crypto is getting from institutional investors, those active in the game will almost definitely have to register their addresses and link them to a personal profile. I don't think the government will be able to cover all crypto, but the big crypto coins will probably be covered. While there will be some resistance, I think the "smart" investors may even push for this as it legimatizes the crypto as a medium of exchange/asset amd further pumps up the price.
With these addresses it would not be hard to monitor the deposits and withdrawals to see exactly what activity is going on... and for the ATO to pass judgement on whether it was for personal use or brought as an investment.
While no one likes taxes, the upside for those that have been hodling is in Australia we will be able to take advantage of the capital gain tax concession if we hold for more than a year, and any transaction costs involved with the sale of crypto for fiat should also be tax deductible... I think :P
Really keen to see the rest of these posts. While I have very little skin in the game, it still good to know.
@strongerbeings
I couldn't agree more with this. I think the natural extension of the transparency of the blockchain is that eventually it will enable monitoring of individual wallet addresses. That said, how long it takes for an organisation like the ATO to catch up with the technology required to actually enable this to happen is another question altogether.
I do think it will be a good thing longer term though if it happens. As you say, it will lend legitimacy to the entire system, and with legitimacy will come greater adoption, both as mediums of exchange and as investments.