> Do these exchanges report 1099s to the IRS?
Not usually:
"With the exception of some business accounts, Coinbase does not provide 1099 forms. Coinbase does however provide a specialized Cost Basis for Taxes report which will help with filing your taxes." [1]
After this hypothetical transaction you will likely owe capital gains tax. It would be hard to hide any significant amount from the IRS if you actually want to convert it to USD, for example by transferring to a bank account [2]. Regardless, the IRS is definitely paying attention and going after back taxes on large exchange accounts [3].
[1] https://support.coinbase.com/customer/en/portal/articles/149...