"The client did not receive a 1099-NEC from the contractor for his service or a 1099-B for the "sale" of his crypto."

That doesn't matter. If he made millions of $$ from private citizens and not working for any business, they wouldn't ever send him a 1099-NEC. It's just informational. That's not his reportable business income. He's supposed to report everything, even if not reported on 1099-NEC.

You have two separate activities. Being paid in money, crypto, or chickens, still is being paid for whatever the value you agreed upon with the customer. That's the business income.

The change in value in the crypto isn't a double taxation. It's no different than he takes a $5k car in trade for services, then sells it for $7k. That's a gain and has nothing to do with how he got the car. He has $5k basis in a car and sold it for $2k profit. That $2k is new money and has never been reported for taxes.

There is no double taxation.