Landmark tax case in NFT sector
Waylon Wilcox, a 45-year-old NFT trader from Pennsylvania, has pleaded guilty to concealing $13 million in profits from CryptoPunk sales across 2021 and 2022, failing to pay $3.3 million in taxes. The case marks one of the first major U.S. prosecutions for tax evasion involving NFTs.
Wilcox sold 97 CryptoPunks at the height of the NFT boom but did not report the sales to the IRS. The timing of his plea, just before the April 15 tax filing deadline, highlights the growing scrutiny on digital assets and tax compliance.
IRS cracks down on crypto underreporting
"IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and NFTs,” said Special Agent Yury Kruty. The agency is using the case to send a strong message that all crypto-related income is taxable and will be pursued.
The IRS has previously issued guidance that NFTs, like other virtual assets, are subject to capital gains taxes. The case sets a precedent that could impact future enforcement and compliance expectations in the digital collectibles space.
CryptoPunks’ shifting market dynamics
CryptoPunks remains the top NFT project by market cap, though trading volumes and prices have softened. While ETH-denominated floor prices have risen, USD value gains have been marginal due to ETH's price drop.
Yuga Labs, which acquired CryptoPunks in 2022, sparked backlash last year by launching a derivative collection. After community criticism, CEO Greg Solano pledged to leave the collection alone, focusing instead on preservation and educational outreach via museums.
