They CAN’T control crypto currency operations.
Bartering is the same way.
But there has always been a black market, beyond the govt. Don’t get caught though.
I don’t know if that checkbox is a trap. It’s all part of the “other income” world. After they busted Capone it dawned on somebody (not Capone’s lawyers, he really should have hired better people) that the IRS didn’t give a way to claim not legally earned money. So they added the “unearned income” area, they say it’s for gambling earnings. But it can be for illegal stuff. Honestly the IRS doesn’t care, just pay up. Of course non-IRS parts of the government can get that info. But nothing is innately illegal in crypto, so there’s nothing they can hit you for.