It’s a god damn trap. They want to catagorize virtual currency under section 26 of US code.
(b) VIRTUAL CURRENCY.—For purposes of this section, the term ‘virtual currency’ means a digital representation of value that is used as a medium of exchange and is not otherwise currency under section 988.
Under section 988 (a)(1)(A)
“Except as otherwise provided in this section, any foreign currency gain or loss attributable to a section 988 transaction shall be computed separately and treated as ordinary income or loss (as the case may be).”
Do you want to pay capital gains that starts at 0% and tops out at 28% or do you want to pay ordinary income which starts at about 10% and goes upward of 35%?
These bills are almost NEVER to your advantage. It also means that the IRS can claim that any coins you recieved by just owning crypto (coin splits) are income events.