A CryptoPunks NFT Trader Indicted For +$13M Tax Fraud

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Updated: 14 April 2025

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The United States Attorney has found Waylon Wilcox, a crypto and non-fungible token investor, guilty of filing false income tax returns. During the annual individual income tax return, the NFT trader deliberately omitted $13 million in income from his CryptoPunks NFT sales. Based on the United States tax laws, the CryptoPunks NFT trader attracts up to six years of imprisonment and a fine.

NFT Trader Charged Over $13M Tax Fraud

In an April 11 press release, the United States Attorney’s Office, Middle District of Pennsylvania, confirmed that it has found Waylon Wilcox, a 45-year-old NFT trader from Dillsburg, Pennsylvania, guilty of filing false income tax returns. Based on the charge sheet presented in court on April 12, 2022, Wilcox filed individual income tax returns for 2021 and deliberately omitted $2 million from his turnover.

April 11th, 2025, Waylon Wilcox of Dillsburg, Pennsylvania, United States, plead guilty to two (2) counts of filing false individual income tax returns to the United States Internal Revenue Service.

Mr. Wilcox lied to the United States Internal Revenue Service regarding his… pic.twitter.com/JVkKMSXbaH

— vx-underground (@vxunderground) April 13, 2025

In 2022, Wilcox filed his annual income tax returns by approximately $4,599,532 and reduced his tax again by approximately $1,098,623. Wilcox obtained most of this unreported income after acquiring and selling 97 pieces of CryptoPunks. In 2021, Wilcox sold approximately 62 Punks for a total of $7,402,935. In 2022, Wilcox sold approximately 35 CryptoPunks NFTs for a total of roughly $4,899,180.

Launched in 2017, CryptoPunks is a non-fungible token collection featuring a limited supply of 10,000 unique, 24×24 pixel art characters stored on the Ethereum blockchain. Punks NFTs have grown in popularity, becoming a symbol of digital art and collectability. Each CryptoPunk NFT is unique, with randomly generated attributes like clothing, accessories, and hairstyles. Punks were initially created by the digital asset firm Larva Labs but are now managed by the digital asset firm Yuga Labs.

NFT Trader “Wilcox” Faces 6-Year Jail Term

Based on United States tax laws, when a taxpayer sells an NFT, including a CryptoPunk, they must report sales proceeds and any gains or losses from the sale of the NFT on their tax return. In his annual tax returns filing, Wilcox falsely answered “no” to the question “At any time during 2022, did you: (a) receive (as a reward, award or payment for property or services); or (b) sell, exchange, gift or dispose of a digital asset (or a financial interest in a digital asset)?” This deliberate action has attracted a six-year jail term.

The Wilcox tax fraud case was investigated by the Internal Revenue Service, Criminal Investigation. The Assistant U.S. Attorney David C. Williams prosecuted the case. The NFT trader Wilcox joins a rapidly growing list of crypto and NFT investors who have been indicated over crypto fraud, including the former FTX CEX boss, Sam Bankman Fried. While commenting about the case, Yury Kruty, the Philadelphian Field Office Special Agent in Charge, remarked:

“IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and non-fungible token (NFT) transactions designed to conceal taxable income. In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”