A Pennsylvania man may face six years in prison after admitting he lied on his tax returns about millions made from trading NFTs. Waylon Wilcox, 45, stood before a federal judge in Harrisburg and pleaded guilty on April 9, 2025.
He admitted to reporting only around $13 million worth of profits earned by selling digital art during two years. According to the records of the court, Wilcox sold scores of CryptoPunks, a trendy collection of NFTs. In 2021, he sold 62 of them for more than $7.4 million.
NFTs and the price of dishonesty
He sold an additional 35 pieces for nearly $4.9 million during 2022. On both returns, he answered “no” to the question of whether he exchanged or sold digital assets.
NFTs, or non-fungible tokens, are digital assets that have proof of ownership, as indicated by the blockchain. Each CryptoPunk within a collection is unique. While some will have similar appearances, they cannot be exchanged or substituted for one another. They can be sold for thousands or millions of cryptocurrency or dollars.
Wilcox underreported much of what he earned. In 2021, he omitted more than $8.5 million of income and saved himself more than $2.1 million worth of taxes. The following year, he underreported by $4.5 million, saving himself well over $1 million.
IRS cracks down on crypto tax evasion
The Internal Revenue Service initiated a criminal investigation into the situation. Their officers tracked down digital transactions and verified the sales.
IRS representatives underscored that honesty counts as much in digital markets as anywhere else. The case demonstrated just how serious virtual currency tax crimes have become.
Prosecutors charged Wilcox with two counts of filing false returns. The counts could be punished with six years in jail. Wilcox will be subject to supervised release and fines as well. The judge will determine the sentence with guidelines.
The case reminds us that digital asset profits are to be reported just as any other type of income. No amount of novelty of money and markets absolves an individual of legal responsibility to make honest filings.
