I've been doing some research on this topic and have not found the exact answer.

Basically, I was wondering what are the legal/tax implications when participating in an ICO as an American citizen?


Let's say a US citizen uses a VPN to partake in an ICO. They double their money and then sell. They decide to cash out to fiat (USD) legally and pay the 40% short-term tax on that trade profit (as well as report it) to the IRS.

I heard that ICO providers prevent US citizens from participating to protect themselves legally from the American Government if a scam were to occur. Is this true? Any advice/input would be greatly appreciated. I basically come to realize this is a gray area.