A Pennsylvania man has pleaded guilty to filing false federal income tax returns that concealed more than $13 million in income from the sale of digital artwork, according to a statement from the US Attorney’s Office for the Middle District of Pennsylvania.

Waylon Wilcox, 45, of Dillsburg, appeared before Senior US District Judge Malachy E. Mannion on April 9 and admitted to underreporting income from NFT sales in both 2021 and 2022. The income came primarily from the sale of CryptoPunks — one of the most valuable and recognizable collections of non-fungible tokens (NFTs) on the blockchain.

Court documents reveal that Wilcox sold 62 CryptoPunks in 2021, generating about $7.4 million, and 35 more in 2022, earning roughly $4.9 million. However, he failed to report this income on his tax returns, underreporting by approximately $8.5 million in 2021 and $4.6 million in 2022. The resulting unpaid tax totaled over $3.2 million across the two years.

In both returns, Wilcox also falsely answered "no" to IRS questions specifically addressing virtual currency and digital asset transactions.

The IRS Criminal Investigation division led the probe, with Special Agent in Charge Yury Kruty stating:

“IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and NFTs designed to conceal taxable income.”

The case underscores growing federal scrutiny over crypto and NFT transactions amid evolving tax compliance regulations. Wilcox now faces up to six years in federal prison, supervised release, and significant fines. Sentencing will be determined by the court at a later date.