A Pennsylvania man has pleaded guilty to federal charges after failing to report millions in profits from trading non-fungible tokens.
In an April 11 press release, the United States Attorney’s Office for the Middle District of Pennsylvania said Waylon Wilcox, 45, admitted to filing false tax returns for 2021 and 2022, underreporting more than $13 million in income from NFT trades.
Most of the unreported gains came from buying and selling 97 pieces from the popular CryptoPunks collection.
According to prosecutors, Wilcox filed a false return in April 2022, claiming significantly less income for 2021 than he actually made. The move reduced his tax bill by over $2.1 million. He did it again in October 2023 for the 2022 tax year, dodging another $1.1 million in taxes.
In total, Wilcox underreported about $8.5 million in 2021 and another $4.6 million in 2022. He falsely answered “no” when asked on both returns if he had traded digital assets.
Federal investigators allege Wilcox made around $7.4 million from selling 62 CryptoPunks in 2021 and another $4.9 million from 35 Punk sales in 2022.
The case was investigated by the Internal Revenue Service and its Criminal Investigation Division. According to the release, taxpayers are expected to report any gains or losses from NFT sales as part of their taxable income.
“In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe,” Philadelphia Field Office Special Agent in Charge Yury Kruty added.
Wilcox could face a maximum penalty of up to six years in prison, along with supervised release and possible fines. A judge will determine his final sentence in accordance with federal sentencing statutes and guidelines.
NFT sales plunge
Wilcox’s case comes at a time when the NFT market is already under pressure, with weekly sales volumes slipping. As previously reported by crypto.news, NFT sales volume fell 4.7% last week to $94.7 million, extending the downturn from $102.8 million the week before.
Activity has also slumped, with NFT buyers and sellers dropping over 75% each, and Q1 2025 trading volume down 24% from the previous quarter, according to DappRadar.
Even top-tier collections like CryptoPunks are feeling the strain. Last week, CryptoPunk #3100, one of just nine Alien Punks, was sold at a $10 million loss. At the time, the collection’s floor price was down 67% since its 2021 peak.
