Waylon Wilcox has admitted to submitting false tax returns in 2021 and 2022
A Pennsylvania man who made millions trading NFTs is now facing serious prison time after admitting he didn’t report much of that income to the IRS. Waylon Wilcox, 45, pleaded guilty this week to filing false tax returns for 2021 and 2022, during which he underreported around $13 million in profits from trading CryptoPunks, one of the most valuable NFT collections in the crypto market.
Federal prosecutors say Wilcox knowingly left out a large chunk of his earnings when filing his taxes. In 2021, he sold 62 CryptoPunk NFTs, making roughly $7.4 million. But in his tax return, he reported far less, which reduced his tax bill by over $2 million. The same pattern continued the following year, when he sold 35 more NFTs and failed to report another $4.9 million in gains. His actions cut his 2022 tax liability by another $1.1 million.
Authorities said Wilcox even answered “no” when asked if he had participated in digital asset transactions on his returns. That misrepresentation caught the attention of IRS investigators, who then launched a deeper investigation into his trading history.
Now, he faces up to six years in prison, plus possible supervised release and financial penalties. Sentencing has not yet been scheduled.
The case highlights how the IRS is ramping up efforts to track digital asset activity. Federal officials said they’re cracking down on those using cryptocurrency or NFTs to dodge taxes. Starting this year, crypto exchanges are required to report certain transactions to the government, and further regulations around decentralized finance are still being debated.
Wilcox’s case is one of the first high-profile NFT-related tax fraud cases in the US, sending a clear signal that digital profits are firmly on the IRS radar.
