Do you need to pay taxes on crypto trading?

I received a voice message from my childhood friend in the middle of the night. We talked for 90 minutes. He does business in Guangzhou and bluntly said his main job is crypto trading, with e-commerce as a side job. The e-commerce business basically doesn't make money, so his main business became his side business. For so many years, most of his income has come from profits made trading crypto. Over the years, he's moved funds through various transactions on different exchanges, cashing out whenever he made money. Now, it's hard to find those transaction records. Recently, he doesn't know who reported him for tax issues, but he and his wife have over 10 million yuan in their accounts, and it seems like it could all be confiscated as a penalty; otherwise, they've been told he could go to jail.

How should this be handled? Is this true? Do you need to pay taxes on crypto trading? Is there a specific regulation that clearly states this?

I didn't process this last night, but after waking up today, it feels like a bomb for people in the industry 💣. Is there anyone knowledgeable who can explain?