CryptoPunk Investor Pleads Guilty to $13M Tax Evasion in First Major NFT-Related IRS Case
A Pennsylvania man has pleaded guilty to tax evasion after concealing millions of dollars in profits from NFT sales—marking a legal first in the rapidly evolving world of digital assets.
Waylon Wilcox, 45, of Dillsburg, Pennsylvania, admitted in federal court that he failed to report over $13 million in income earned from selling 97 CryptoPunk NFTs during 2021 and 2022. As a result, he avoided paying nearly $3.3 million in taxes, according to a statement from the U.S. Attorney’s Office for the Middle District of Pennsylvania.
The case, believed to be the first major NFT-related tax evasion prosecution in the United States, underscores the Internal Revenue Service’s growing focus on digital asset compliance. Wilcox now faces up to six years in prison, although his guilty plea could reduce the final sentence.
The timing of the plea—just ahead of the April 15 U.S. tax deadline—serves as a high-profile reminder of the IRS’s stance on cryptocurrency and NFT transactions. According to IRS guidance, gains from virtual currencies and NFTs are subject to capital gains tax and must be reported by U.S. taxpayers.
“IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and non-fungible token (NFT) transactions designed to conceal taxable income,” said Yury Kruty, Special Agent in Charge of the Philadelphia field office. He emphasized the importance of fairness in the tax system, especially in an era of fast-moving financial innovation.
Adding an ironic twist, local reports revealed that Wilcox’s girlfriend once solicited donations on Facebook to support her daughter’s participation in beauty pageants—despite the couple’s concealed windfall from high-value NFT sales.
The CryptoPunk Context
Wilcox’s profits stemmed from his sales of CryptoPunks, one of the most iconic NFT collections on the Ethereum blockchain. Created in 2017 and later acquired by Yuga Labs (the company behind Bored Ape Yacht Club), CryptoPunks became the face of the 2021 NFT bull run.
Despite a cooling market, CryptoPunks remain the largest NFT project by market cap, according to CoinGecko. The collection’s floor price has climbed in ETH terms over the last six months, but the dollar value has stayed relatively flat—rising only from $66,900 to $68,800, per The Block.
Yuga Labs made headlines last year for its controversial attempt to launch a derivative collection, Super Punk World, which was met with backlash from the community. In response, Yuga CEO Greg Solano pledged that the company would no longer alter or commercialize the original Punks.
“They will just be decentralized and preserved on the blockchain,” Solano stated, adding that Yuga’s only remaining involvement would be helping cultural institutions acquire CryptoPunks for educational purposes.