NFT CryptoPunks collector faces 6 years in US prison for hiding proceeds from asset sales

He pleaded guilty to failing to pay $3,3 million in taxes

14.04.2025 - 15:20

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What’s new? A US citizen has pleaded guilty to hiding $13 million in cryptocurrency income from the Internal Revenue Service (IRS). Waylon Wilcox, 45, of Dillsburg, Pennsylvania, was a major holder of CryptoPunks non-fungible tokens (NFTs), one of the earliest and once most popular NFT collections, the value of individual tokens from which reached several million dollars at its peak.

Material by The Block

What else is known? According to prosecutors, Wilcox sold 97 NFTs from the CryptoPunk collection between 2021 and 2022, but did not report a $13 million profit on his tax return, which allowed him to avoid paying $3,3 million in taxes.

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This case was the first major tax evasion trial on NFT sales in the United States. The maximum penalty for Wilcox under this article could be six years in prison, but a guilty plea would likely result in a reduced sentence.

Wilcox pleaded guilty shortly before April 15, the deadline by which most US taxpayers must file their 2024 returns. If a taxpayer sells virtual currency, it must recognize gain or loss on the sale, subject to any limitations on deducting losses, according to IRS guidance.

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The defendant sold his tokens at the height of the NFT boom, and since then, trading volumes and the value of assets in the sector have significantly decreased.

Thus, last week the collector sold CryptoPunk token number 3100 with a loss of $10 million. He sold the asset for 4000 ETH ($6 million), although he bought it for 4500 ETH ($16 million) in March 2024.

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