NFT Trader Faces Up to Six Years in Prison for Tax Evasion

An American citizen has admitted to two counts of filing false tax returns, concealing approximately $13 million in profits from NFT transactions involving the CryptoPunks collection. This was reported in a press release from the U.S. Attorney’s Office for the Middle District of Pennsylvania.

According to authorities, Waylon Wilcox submitted incorrect data in his tax returns for 2021 and 2022. During this period, he profited from the sale of 97 tokens, yet answered “no” to questions about digital currency transactions and did not report the earnings in his documents.

As a result of filing false information, Wilcox failed to pay approximately $3.2 million in taxes owed.

“When a taxpayer sells NFTs, including [CryptoPunks tokens], they must report any gains or losses from the sale on their tax return,” the prosecution emphasized.

Under federal law, the maximum penalty includes up to six years of imprisonment, probation, and a fine.

In April, a collector sold a rare CryptoPunks token at a $10 million loss.