- Pennsylvania man Waylon Wilcox pleaded guilty to hiding over US$13M in income from selling 97 CryptoPunks NFTs, dodging roughly US$3.3M in taxes.
- His case marks the first major US tax evasion prosecution involving NFTs.
- Wilcox faces up to six years in prison, though a lighter sentence is likely; reports reveal he concealed his wealth while his partner solicited donations online.
If something is true in this world, it is that you can sell pixelated monkeys for millions and stay anonymous. Until Uncle Sam comes asking where his cut is.
Our story today is about a 45-year-old Pennsylvania resident who pleaded guilty to federal tax evasion after failing to report over US$13M (AU$20.6M) in income from the sale of nearly 100 CryptoPunk NFTs. And yes, this appears to be the first major US tax evasion case involving non-fungible tokens (as far as public records show).
Waylon Wilcox of Dillsburg sold 97 CryptoPunks between 2021 and 2022, netting millions in profits… but omitted the transactions from his tax filings. In doing so, he avoided approximately US$3.3M (AU$5.4M) in taxes, according to the US Attorney’s Office for the Middle District of Pennsylvania.
Related: Paul Atkins Confirmed as SEC Chair, Bringing Pro-Crypto Stance to the Helm
Guilty Plea Before Tax Day
The timing couldn’t be more symbolic and hilarious: Wilcox entered his guilty plea just ahead of the April 15 IRS tax deadline. Under current IRS guidelines, any sale of digital assets (cryptocurrencies or NFTs) is considered a taxable event, and gains must be reported accordingly.
Yury Kruty, special agent in charge of the Philadelphia field office, stated:
IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and non-fungible token (NFT) transactions designed to conceal taxable income.
Yury Kruty, IRS special agentThe story gets even crazier.
Local outlet Daily Voice reported that Wilcox’s girlfriend had previously turned to Facebook to request donations for her daughter’s beauty pageant expenses while Wilcox was allegedly sitting on millions in untaxed NFT profits. God forbid a man has hobbies!
Court documents suggest the underreporting wasn’t an accident. The IRS contends Wilcox deliberately concealed the transactions, prompting a criminal probe that ultimately led to the charges.
He’s now facing a maximum of six years in prison for the tax crimes, though his guilty plea is likely to earn him a lighter sentence under federal guidelines (sentencing has yet to be scheduled).
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