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HMRC crypto legislation doesn't make sense for most tokens and DeFi products. Simple investing in institutionally backed assets (such as those with an ETF) is very different from most highly volatile, experimental and low liquidity tokens. In these cases getting taxed when exchanging them for fiat seems the logical way forward.

There are no HMRC rules on illiquid crypto assets, highly volatile or experimental tokens - which constitutes most of crypto. The legislation is way behind what actually happens in crypto, hence the non answers from the admin. Investing in institutionally backed assets (assets with an ETF) such as BTC or ETH should fall under the legislation, but all other types of crypto could be argued not to, and getting taxed when they are exchanged to fiat seems the logical way to manage these types of assets.