A 45-year-old NFT trader, Waylon Wilcox, is facing up to six years in prison after pleading guilty to underreporting nearly $13 million in profits from trading high-value CryptoPunk NFTs. The U.S. Attorney’s Office for the Middle District of Pennsylvania confirmed the guilty plea in an April 11 press release.

Wilcox admitted to filing false tax returns for 2021 and 2022. In 2021 alone, he sold 62 CryptoPunks for $7.4 million but reported far less, slashing his tax bill by $2.1 million. The following year, he sold 35 more for $4.9 million, underreporting his income again and dodging another $1.1 million in taxes.

Federal authorities revealed that Wilcox deliberately selected “no” when asked if he had digital asset transactions on both tax returns. His activity involved 97 CryptoPunk NFTs—part of a collection valued at $687 million—making him a notable figure in the NFT space.

The IRS and Criminal Investigation Department jointly led the probe. Special Agent Yury Kruty emphasized the importance of maintaining public confidence by ensuring crypto traders follow tax laws.

This case surfaces amid tightening U.S. crypto tax regulations. Since January, centralized exchanges must report all digital asset transactions. Though President Trump recently repealed a rule targeting DeFi platforms, experts argue stablecoin and crypto banking policies deserve more attention.

As crypto gains traction, regulators are signaling that tax evasion—whether on coins or NFTs—won’t go unnoticed. The sentencing date for Wilcox remains pending, but the case already stands as a major warning to digital asset traders across the U.S.