Pennsylvania Man Pleads Guilty to $13M CryptoPunks Tax Fraud

Waylon Wilcox, a 45-year-old man from Pennsylvania, faces up to six years in prison after pleading guilty to concealing over $13 million in profits from CryptoPunks NFT sales between 2021 and 2022. He admitted to filing false tax returns that misrepresented his income from 97 NFT transactions, resulting in a tax liability reduction of approximately $3.2 million. The Department of Justice emphasized that taxpayers must report any gains or losses from NFT sales on their returns. In 2021, Wilcox sold 62 CryptoPunks for around $7.4 million and followed up with 35 more for nearly $4.9 million in 2022, but falsely claimed he had not disposed of any digital assets. This case highlights the increasing scrutiny by the IRS on cryptocurrency and NFT transactions, particularly during a time of evolving tax regulations. The current market for CryptoPunks has significantly cooled, with their floor price dropping to around $69,000 from previous highs.