He got rich off pixelated punks — and punked the Internal Revenue Service in the process.
A Pennsylvania man faces federal prison after pleading guilty to flipping more than $13 million worth of digital art from the infamous CryptoPunks NFT collection — and reporting none of it to the IRS, prosecutors said Friday.
Waylon Wilcox, 45, of Dillsburg, pleaded guilty Tuesday to filing false tax returns in 2021 and 2022. Over those two years, Wilcox sold 97 CryptoPunks — tiny, pixelated avatars from a 10,000-piece digital series — and made $7.4 million one year and $4.9 million the next.
But on his tax returns, he told the government he hadn’t touched crypto at all — checking “no” on both years when asked about virtual asset income. The omission allegedly cost the IRS over $3.2 million in unpaid taxes.
CryptoPunks, created in 2017, became breakout stars of the NFT craze. At the peak, one sold for $11.8 million at Sotheby’s in June 2021, and a set of nine fetched $17 million at Christie’s one month before. Even in recent months, two individual punks sold for $6.1 million and $2.33 million, according to nftpricefloor.com.
“When a taxpayer sells an NFT, including a Punk, then the taxpayer must report sales proceeds and any gains or losses from the sale of the NFT on their tax return,” the Justice Department wrote in a press release Friday.
Wilcox, who filed the bogus returns from his quiet home in Cumberland County, now faces up to six years in prison, plus supervised release and a hefty fine.
And one more accessory, courtesy of the feds — an orange jumpsuit.
It is not immediately clear when he will be sentenced, according to a review of his court records.
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