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"fair value" is just a financial term meaning "price traded on the open market"[1]. It makes no qualitative judgement about if that price is "fair" in the colloquial sense.

[1] This is trivial to do with equities (top-of-book bid/ask prices are the fair). Currencies are a little trickier because your relationship with the exchange determines the quotes you see. Certainly, currency swaps do have a fair, but defining it is a little trickier.

I think you're reading this wrong. They're not going after coins that have values of over $10,000 (eg bitcoin), they're going after any crypto transactions that have value over $10,000. So it doesn't matter whether you're trading 0.25 BTC or 25000 DOGE, they both have USD value of over $10,000 and have to be reported.

It's not hard at all, any reasonable group of people will say, "what was the price on coinbase (or equivalent) when you sold?"

That's also the valuation to be used for tax reporting, since exchanging cryptocurreny is a deemed disposition for capital gains taxes.