Waylon Wilcox, a 45-year-old man from Dillsburg, Pennsylvania, has admitted to not reporting his income from selling CryptoPunk NFTs to the IRS. This decision allowed him to avoid paying nearly $3.3 million in taxes.
He made over $13 million from selling 97 CryptoPunks between 2021 and 2022 but did not include these sales in his tax filings. This case is significant as it is one of the first major instances of tax evasion related to NFT sales in the United States.
Wilcox’s guilty plea came just before the tax filing deadline for most Americans. According to IRS rules, when someone sells virtual currency, they must report any profit or loss from that sale.
The IRS is focused on uncovering financial schemes that involve virtual currencies and NFTs, ensuring that everyone pays their fair share of taxes. Yury Kruty, the special agent in charge, emphasized the importance of maintaining trust in the tax system.
As a result of his guilty plea, Wilcox could face up to six years in prison, but he may receive a lighter sentence due to his admission of guilt.
The sales of CryptoPunks took place during a time when NFTs were very popular. However, the market for NFTs has since declined. Recently, a CryptoPunk sale resulted in a loss of $10 million for the seller.
Despite this, CryptoPunks remains the largest NFT project by market value. Over the past six months, the floor price of CryptoPunks has increased in Ethereum terms, but due to the falling price of Ethereum, their dollar value has not changed much. The floor price was about $66,900 six months ago and is now around $68,800.
Yuga Labs, the company behind CryptoPunks, faced criticism last year for launching a new collection called Super Punk World. After the backlash, Yuga’s CEO Greg Solano stated that they would not interfere with the CryptoPunks collection anymore.
He mentioned that CryptoPunks would be left to exist independently on the blockchain, and the company would only support museums in acquiring a Punk to help educate people about them.
