NFT Trader Faces Up to 6 Years in Prison for $13M Tax Evasion on CryptoPunks
Waylon Wilcox, a 45-year-old NFT trader, is facing up to six years in federal prison after pleading guilty to underreporting nearly $13 million in profits from trading high-value CryptoPunks NFTs, according to the U.S. Attorney’s Office for the Middle District of Pennsylvania.
In April 2022, Wilcox filed a false tax return for 2021, claiming significantly less than his actual income—underreporting by $8.5 million and reducing his tax liability by approximately $2.1 million. He repeated the offense for 2022, underreporting an additional $4.6 million and dodging another $1.1 million in taxes.
The combined charges could land Wilcox with:
- Up to six years in prison
- Supervised release
- Significant financial penalties
- Massive Gains from Trading CryptoPunks
Wilcox was deeply involved in trading CryptoPunks, one of the most valuable NFT collections in the world with a market cap of $687 million.
- In 2021, he sold 62 CryptoPunks for a profit of $7.4 million
- In 2022, he sold another 35 CryptoPunks for $4.9 million
- On both tax filings, he falsely answered “no” to whether he had digital asset transactions
- IRS Cracks Down on Crypto Tax Evasion
Special Agent Yury Kruty of the IRS Philadelphia Field Office emphasized that Wilcox’s actions are part of a broader issue:
“The IRS Criminal Investigation unit is committed to uncovering complex schemes using digital assets and NFTs to hide taxable income.”
The case is part of the IRS’s expanded effort to tighten crypto tax enforcement, especially after new 2024 regulations began requiring third-party reporting for crypto exchanges.
Regulatory Landscape Shifts Under Trump
On April 10, President Donald Trump signed a resolution overturning a Biden-era IRS rule that would have imposed tax reporting obligations on decentralized finance (DeFi) platforms. The original rule, set to take effect in 2027, was widely criticized as overly broad.
As crypto regulation heats up, some legal experts argue that stablecoin legislation and crypto banking reforms should come before new tax policies, pointing to the need for clear, tailored regulatory frameworks rather than blanket rules.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a "detective-like" mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
