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NFT Trader Faces 6-Year Sentence Over $13M Tax Fraud

Waylon Wilcox, a non-fungible token (NFT) and cryptocurrency investor, has pleaded guilty to filing false income tax returns, omitting over $13 million in earnings from CryptoPunks NFT sales. The U.S. Attorney’s Office for the Middle District of Pennsylvania confirmed the charges in an April 11, 2025, press release.

Wilcox, a 45-year-old resident of Dillsburg, Pennsylvania, admitted to two counts of filing false tax returns for the years 2021 and 2022. Court documents reveal that in 2021, Wilcox sold 62 CryptoPunks NFTs for approximately $7.4 million, while in 2022, he sold 35 additional CryptoPunks for roughly $4.9 million. Despite these earnings, he failed to report the income and claimed deductions that reduced his tax liability by over $1 million.

The charge sheet, originally filed on April 12, 2022, stated that Wilcox omitted $2 million in 2021 alone. His 2022 tax filings were short by $4.6 million in reported income.

In both years, Wilcox falsely checked “no” on the IRS digital asset question, which asks whether the taxpayer received, sold, exchanged, gifted, or otherwise disposed of any digital assets.

CryptoPunks, created in 2017 by Larva Labs and now managed by Yuga Labs, are a highly sought-after collection of 10,000 unique, pixel-art NFTs stored on the Ethereum blockchain.

Wilcox's actions violate U.S. tax laws, which require digital asset transactions—including NFT sales—to be reported for tax purposes. His conviction could lead to a maximum sentence of six years in prison and a significant financial penalty.

The IRS Criminal Investigation unit led the investigation, with Assistant U.S. Attorney David C. Williams prosecuting the case.

“IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and NFTs designed to conceal taxable income. It’s more important than ever that Americans trust the system and know everyone is playing by the same rules.