NFT trader faces prison for $13M tax fraud on CryptoPunk profits

Waylon Wilcox, a 45-year-old resident of Dillsburg, Pennsylvania, has pleaded guilty to filing false income tax returns after failing to report over $13 million in profits from selling CryptoPunks NFTs. Between 2021 and 2022, Wilcox sold 97 CryptoPunks—62 in 2021 for approximately $7.4 million and 35 in 2022 for about $4.9 million. Despite these substantial earnings, he falsely indicated on his tax returns that he had not engaged in digital asset transactions, resulting in an estimated $3.2 million in unpaid taxes.

Wilcox now faces up to six years in federal prison, along with supervised release and significant fines. His sentencing date has yet to be determined. This case underscores the importance of accurately reporting income from digital asset transactions, as the IRS continues to scrutinize cryptocurrency and NFT activities.

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