Taxation and Crypto

I'm struggling to see the difference gaming (another form of gambling) has versus 'investing' other than "investments" seem somewhat exclusive to financial instruments, commercial ventures and physical property.

Cryptocurrency has no guaranteed value, expressly or implicitly defined, which seems to separate it from the above.

Most cryptocurrency exchanges aren't regulated and seemingly don't want to be. Many are offshore entities.

Cryptocurrency is not a currency- (according to BoC), and is not backed by any dollar (except in El Salvador).

So if it isn't backed, isn't guaranteed, has no legal protection… I don't know how it could be a security, or could be seen to get any benefits from government taxation. No representation should mean no taxation.

It appears the CAD government is treating crypto like a commodity.

What's to stop someone from wash trading to a different (off exchange wallet) to directly make unprofitable trades – and end up with net zero taxes? Is this illegal?

Is a crypto wallet within the governance of a country? – it seems like most wallets aren't bank accounts and they aren't registered.

It seems like the government has no method to control crypto, as it doesn't rely on traditional financial method, governance/regulation, etc. It relies on private utilities and decentralized networks that have no stake in the underlying coins and tokens; many of these networks are multinational as well.

I'm struggling to understand how the government plans to advance taxation on something that isn't within their jurisdiction, that the government aid to by regulating (because they can't), exists outside their borders, has no traditional financial legal definition, and is not their property.

This smells like taxation without representation/regulation.

Disclaimer: I pay my taxes, believe in a socially progressive taxation structure, and that taxes make my society a better place to live. I also believe that for a tax to be paid, a service needs to be rendered (regulation) – otherwise it's theft (?).