NFT Trader Pleads Guilty to $13M Tax Fraud

Waylon Wilcox, a 45-year-old NFT trader from Pennsylvania, pleaded guilty to federal charges for underreporting nearly $13 million in profits from trading CryptoPunks. He admitted to filing false income tax returns for the years 2021 and 2022, significantly reducing his tax liabilities by omitting earnings from 97 NFT transactions. In 2021, he reported selling 62 CryptoPunks for around $7.4 million, followed by 35 sales worth $4.9 million in 2022, while falsely claiming he did not trade digital assets. Wilcox faces a maximum penalty of up to six years in prison, with sentencing details yet to be determined. The case highlights increasing scrutiny and regulatory focus on NFT transactions and tax compliance within the cryptocurrency market. Federal authorities emphasize the importance of accurate reporting for taxpayers involved in digital asset trading, given the rising involvement of regulators in the sector.