Woken up in the middle of the night by an old friend's phone call, we talked for an hour and a half and still couldn't make sense of things.

He's doing e-commerce in Guangzhou, but his real profits come from cryptocurrency trading—over the years, e-commerce has hardly been profitable, while digital asset investments have become his main source of income. He’s traded on various platforms for years, cashing out profits, and now his transaction records are scattered everywhere, making them hard to track.

Now here's the problem: he doesn't know who tipped them off, but the tax authorities have come knocking. He and his wife have over 10 million in their accounts, and it’s said that they might have to pay back taxes plus penalties on the whole amount; if they don’t cooperate, there could be even more serious consequences.

This made me break out in a cold sweat—do digital asset transactions really need to be taxed? If so, what's the legal basis? What's the compliant way to cash out?

What do the veterans in the industry think? Is this a wake-up call for everyone in the business?