CryptoPunks Seller Pleads Guilty in First Major NFT Tax Evasion Case

Waylon Wilcox, 45, from Dillsburg, Pennsylvania, has pleaded guilty to tax evasion after failing to report over $13 million in earnings from selling 97 CryptoPunk NFTs in 2021 and 2022. According to the U.S. Attorney’s Office for the Middle District of Pennsylvania, Wilcox avoided nearly $3.3 million in taxes by not disclosing the income to the IRS—marking one of the first major U.S. tax cases involving NFT sales.

As outlined by IRS guidance, U.S. taxpayers must report gains or losses from virtual asset transactions, including NFTs. Wilcox’s guilty plea came just ahead of the April 15 tax filing deadline, further emphasizing the agency’s intensified scrutiny on crypto-related income. “IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and NFT transactions,” said Yury Kruty, special agent in charge of the IRS’s Philadelphia field office.

Wilcox could face up to six years in prison, though his sentence may be reduced due to his plea. Media reports also revealed that his girlfriend had asked for financial help online during the height of his unreported crypto earnings.

CryptoPunks, created by Larva Labs and later acquired by Yuga Labs in 2022, remain the largest NFT collection by market cap, despite a drop in overall trading volume. Yuga Labs faced backlash last year for its “Super Punk World” spin-off, leading CEO Greg Solano to announce the company would no longer modify or commercialize the CryptoPunks brand, opting instead to support institutional preservation efforts.

Despite ETH price volatility, the dollar floor price for CryptoPunks has slightly increased—from roughly $66,900 to $68,800 over the past six months—according to The Block. However, the NFT market remains far below its 2021 peak.