CryptoPunks Seller Pleads Guilty to Evading $3.2M in Taxes

Waylon Wilcox, a 45-year-old resident of Dillsburg, Pennsylvania, has pleaded guilty to filing false tax returns that concealed over $13 million in profits from the sale of CryptoPunks NFTs. The case underscores the increasing scrutiny by tax authorities on cryptocurrency and NFT transactions.

Wilcox admitted to underreporting income from 97 CryptoPunks transactions across 2021 and 2022. Specifically, he sold 62 CryptoPunks in 2021 for approximately $7.4 million and another 35 in 2022 for nearly $4.9 million. Despite these significant sales, Wilcox falsely claimed on his tax forms that he had not disposed of any digital assets, thereby avoiding roughly $3.2 million in taxes.

The CryptoPunks collection, consisting of 10,000 unique pixel art characters, gained significant popularity during the NFT boom. Each "Punk" is a digital collectible with proof of ownership tracked on the blockchain. These digital assets reached their peak value in August 2021, with a minimum sale price of 125 ETH, equivalent to approximately $479,000 at the time.

Wilcox's tax evasion was substantial, with misrepresentations allowing him to dodge $2.18 million in taxes for 2021 and another $1.09 million in taxes for 2022. The case serves as a reminder that NFT sales have clear tax implications, requiring taxpayers to report sales proceeds and any gains or losses.

Yury Kruty, Special Agent in Charge of the Philadelphia Field Office, emphasized the commitment of the IRS Criminal Investigation division to unraveling complex financial schemes involving virtual currencies and NFT transactions. Kruty highlighted the importance of tax compliance, stating that it is crucial for the American public to feel confident that everyone is adhering to tax rules and paying their dues.

Wilcox appeared in federal court on April 9, 2025, before Senior United States District Judge Malachy E. Mannion. He pled guilty to a two-count criminal information charging him with filing false individual income tax returns. The charges carry serious consequences, with a maximum penalty of up to six years in prison, a term of supervised release following imprisonment, and a fine. The final sentence will be determined by the judge, considering applicable federal sentencing statutes and the Federal Sentencing Guidelines.

The investigation was conducted by the Internal Revenue Service, Criminal Investigation division, with Assistant U.S. Attorney David C. Williams prosecuting the case. The guilty plea serves as a warning to others in the crypto space, highlighting that tax authorities remain vigilant about ensuring proper reporting of digital asset transactions, even as NFT markets have cooled from their 2021 peaks.