The case highlights growing IRS scrutiny of cryptocurrency and NFT transactions. Court documents show Wilcox sold 62 CryptoPunks in 2021 for approximately $7.4 million. He then sold another 35 in 2022 for nearly $4.9 million.
On both years’ tax returns, Wilcox falsely answered “no” when asked if he had disposed of any digital assets. This misrepresentation allowed him to avoid paying roughly $3.2 million in taxes.
The CryptoPunks Collection
CryptoPunks is a collection of 10,000 unique pixel art characters that became highly sought-after during the NFT boom. Each “Punk” contains digital proof of ownership tracked on the blockchain.
These digital collectibles reached their peak value in August 2021. At that time, they sold for a minimum of 125 ETH (approximately $479,000).
The market has cooled since then. Currently, the floor price for a CryptoPunk is about 42.49 ETH (just under $69,000), representing an 85.7% drop from the all-time high.
Recent transactions show the volatility in the market. Just last week, a CryptoPunks holder sold their NFT for $6 million, taking a $10 million loss on the trade.
Tax Obligations for Digital Assets
The case serves as a reminder that NFT sales have clear tax implications. When a taxpayer sells an NFT, they must report the sales proceeds and any gains or losses.
Wilcox’s tax evasion was substantial. His misrepresentations allowed him to dodge $2.18 million in taxes for 2021. He avoided another $1.09 million in taxes for 2022.
“IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and non-fungible token transactions designed to conceal taxable income,” said Yury Kruty, Philadelphia Field Office Special Agent in Charge.
Kruty emphasized the importance of tax compliance. “In today’s economic environment, it’s more important than ever that the American people feel confident that everyone is playing by the rules and paying the taxes they owe.”
The investigation was conducted by the Internal Revenue Service, Criminal Investigation division. Assistant U.S. Attorney David C. Williams is prosecuting the case.
Wilcox appeared in federal court on April 9, 2025, before Senior United States District Judge Malachy E. Mannion. He pled guilty to a two-count criminal information charging him with filing false individual income tax returns.
The charges carry serious consequences. Under federal law, these offenses have a maximum penalty of up to six years in prison. The sentence may also include a term of supervised release following imprisonment and a fine.
The final sentence will be determined by the judge. This decision will come after consideration of the applicable federal sentencing statutes and the Federal Sentencing Guidelines.
The guilty plea serves as a warning to others in the crypto space. Even as NFT markets have cooled from their 2021 peaks, tax authorities remain vigilant about ensuring proper reporting of digital asset transactions.
This articles is written by : Nermeen Nabil Khear Abdelmalak
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By Nermeen Nabil Khear