U.S. federal authorities have charged NFT investor Waylon Wilcox with concealing income from digital asset transactions. According to the U.S. Attorney’s Office for the Middle District of Pennsylvania, the trader failed to report nearly $13 million in profits from trading tokens from the CryptoPunks collection by filing false tax returns for 2021 and 2022. On April 9, he pleaded guilty to two counts of submitting false information to tax authorities.
Details of the Tax Fraud Scheme
In April 2022, Wilcox filed his 2021 tax return, underreporting his taxable income by $8.5 million, which allowed him to reduce his tax liability by approximately $2.1 million. In October 2023, he repeated the scheme, concealing $4.6 million in income for 2022 and further reducing his tax liability by $1.1 million.
In total, he conducted 97 transactions involving CryptoPunks — one of the most well-known NFT collections in the market, with a total market capitalization of $687 million at the time of the investigation.
In 2021, he sold 62 tokens and earned $7.4 million in profit. In 2022, he sold another 35 tokens for $4.9 million. In both instances, he knowingly answered “no” to the tax form question about whether he had engaged in digital asset transactions.
Tax Authorities Position
The investigation was led by the IRS Criminal Investigation Division. Yury Kruty, Special Agent in Charge of the Philadelphia field office, emphasized that the IRS “is committed to uncovering crypto and NFT-related tax evasion schemes.” He stated it is critical to maintain trust in the tax system and ensure all participants in the digital economy comply with the law.
The maximum penalty under federal law for both counts is up to six years in prison, supervised release, and fines. The exact sentencing terms have not yet been announced.
Tighter Tax Oversight in the U.S.
As of January 2025, new rules in the U.S. require centralized crypto exchanges (CEXs) and brokers to report all digital asset transactions. This initiative is part of a broader IRS campaign to increase transparency in the crypto industry.
In June 2024, a regulation was passed to extend these requirements to decentralized platforms (DeFi) as well. However, on April 10, President Donald Trump signed a joint congressional resolution repealing the measure. The new rule was originally scheduled to take effect in 2027 but faced criticism for placing excessive pressure on DeFi infrastructure.
Previous Cases
This is not the first tax-related conviction in the crypto space. In December 2024, Austin resident Frank Richard Ahlgren III became the first person in the U.S. to be convicted of tax evasion for Bitcoin transactions. He failed to report $3.7 million in profits from selling 640 BTC that he had purchased in 2015 for under $500 each and sold in 2017 at an average price of $5,807. The profits were invested in real estate, but the income was not declared.
This post is for informational purposes only and is not an ad or investment advice. Please do your own research making any decisions.