CryptoPunk, Tax Flunk: NFT Seller Pleads Guilty In $13M Fraud Case

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CryptoPunk, Tax Flunk: NFT Seller Pleads Guilty In $13M Fraud Case

, Benzinga - 2:41 PM ET 4/14/2025 default

A Pennsylvania man could spend up to six years in prison after pleading guilty to concealing over $13 million in NFT sales from tax authorities.

What Happened: Waylon Wilcox, 45, admitted to filing false individual income tax returns in 2022 and 2023, according to a Department of Justice statement released Friday and reported by Fortune on Monday.

The DOJ alleges Wilcox sold 97 NFTs from the iconic CryptoPunks collection between 2021 and 2022, generating over $13 million in proceeds that he failed to report to the IRS.

“When a taxpayer sells an NFT, including a Punk, then the taxpayer must report sales proceeds and any gains or losses from the sale of the NFT on their tax return,” the DOJ statement emphasized.

By omitting these substantial sales, Wilcox allegedly reduced his tax liability by approximately $3.2 million over the two-year period.

Lawyers representing Wilcox did not respond to Fortune’s request for comment.

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Why It Matters: The case comes during a transitional period for cryptocurrency tax reporting.

Earlier this year, the IRS issued Notice 2025-7, providing temporary relief that allows crypto holders using centralized exchanges in 2025 to have more flexibility in their accounting methods rather than defaulting to the First-In-First-Out (FIFO) method.

However, this relief doesn’t exempt traders from reporting cryptocurrency transactions.

According to the DOJ, Wilcox sold 62 CryptoPunks for over $7.4 million in 2021 during the height of the NFT boom, followed by another 35 Punks for nearly $5 million in 2022 as the market began to cool.

CryptoPunks, created in 2017, is one of the oldest and most valuable NFT collections, with individual pieces once selling for as much as $23.7 million.

The floor price for a CryptoPunk currently sits at 42.42 Ethereum (CRYPOT: ETH), approximately $70,000.

The case serves as a reminder to cryptocurrency investors that while the IRS has temporarily eased some reporting requirements for 2025, the fundamental obligation to report all cryptocurrency transactions remains unchanged.

The DOJ has not disclosed how they discovered the unreported sales.

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