First Major U.S. Tax Evasion Case Involving NFTs Highlights IRS Crackdown on Crypto Assets
DILLSBURG, PA — Waylon Wilcox, a 45-year-old Pennsylvania resident, has pleaded guilty to federal tax evasion after concealing more than $13 million in income from the sale of 97 CryptoPunks NFTs—marking the first major U.S. prosecution of tax fraud involving non-fungible tokens.
Between 2021 and 2022, Wilcox sold the digital collectibles for millions in profit but deliberately omitted the earnings from his tax filings, evading approximately $3.3 million in taxes, according to the U.S. Attorney’s Office for the Middle District of Pennsylvania.
A Timely Guilty Plea
Wilcox’s admission of guilt, which was made shortly before the April 15 tax deadline, highlighted the IRS’s increased attention to NFT and cryptocurrency transactions. Any sale of digital assets is regarded as a taxable event under existing tax regulations, and holders are required to record capital gains.
“IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and non-fungible tokens designed to conceal taxable income,” said Yury Kruty, special agent in charge of the Philadelphia field office.
Hidden Wealth Amid Online Donations
The case took a bizarre turn when local reports revealed that Wilcox’s partner had solicited donations on Facebook to cover her daughter’s beauty pageant expenses—while Wilcox allegedly sat on millions in unreported NFT profits.
According to court records, Wilcox purposefully concealed transactions in order to evade taxes, which prompted a criminal inquiry. His guilty plea could result in a reduced sentence, but he now faces a maximum of six years in prison. There is currently no planned sentencing.
The case serves as a stark warning to crypto investors: even in the decentralized world of digital assets, the IRS expects its share.
