You are not taxed on crypto received as a gift. It is tax-free and any gains made when later selling the crypto for fiat or other crypto is also tax-free.

The reason for this is that you do not have “speculative intent” when receiving a gift and thus acquiring the crypto. It is precisely the speculative intent that is decisive for whether the tax liability arises for trading assets under the State Tax Act.

However, the person giving a gift must remember the rules on gift tax. Depending on who you give a gift to, there are limits on the amount of the gift that you can give without the recipient having to pay gift tax.

So, can’t you just give crypto to your friends and they can give crypto back as a gift to avoid taxes? In principle, you can. But if it is done in a way that is effectively intended to circumvent the rules for taxation of spot trades, the tax authorities will very likely treat it as circumvention and tax it as spot trades between the gift giver and gift receiver.