Pennsylvania man pleads guilty to flipping more than $13M of digital art from infamous NFT collection — and reporting zilch to IRS

He sewage rich | disconnected pixelated punks — and punked the Internal Revenue Service in nan process.

A Pennsylvania man faces federal prison after pleading guilty to flipping much than $13 cardinal worthy of integer creation from the infamous CryptoPunks NFT collection — and reporting nary of it to nan IRS, prosecutors said Friday.

Waylon Wilcox, 45, of Dillsburg, pleaded blameworthy Tuesday to filing mendacious taxation returns successful 2021 and 2022. Over those 2 years, Wilcox sold 97 CryptoPunks — tiny, pixelated avatars from a 10,000-piece integer bid — and made $7.4 cardinal 1 twelvemonth and $4.9 cardinal nan next.

Waylon Wilcox, 45, of Dillsburg, pleaded blameworthy Tuesday to filing mendacious taxation returns successful 2021 and 2022. REUTERS

But connected his taxation returns, he told nan authorities he hadn’t touched crypto astatine each — checking “no” connected some years erstwhile asked astir virtual plus income. The omission allegedly costs nan IRS complete $3.2 cardinal successful unpaid taxes.

CryptoPunks, created in 2017, became breakout stars of nan NFT craze. At nan peak, one sold for $11.8 cardinal astatine Sotheby’s successful June 2021, and a group of 9 fetched $17 cardinal astatine Christie’s 1 month before. Even successful caller months, 2 individual punks sold for $6.1 cardinal and $2.33 million, according to nftpricefloor.com.

“When a payer sells an NFT, including a Punk, past nan payer must study income proceeds and immoderate gains aliases losses from nan waste of nan NFT connected their taxation return,” nan Justice Department wrote successful a press release Friday.

An NFT titled “CryptoPunk 7523” by Larva Labs connected display. Getty Images

Wilcox, who revenge nan bogus returns from his quiet location successful Cumberland County, now faces up to six years successful prison, positive supervised merchandise and a hefty fine. 

And 1 much accessory, courtesy of nan feds — an orangish jumpsuit.

It is not instantly clear erstwhile he will beryllium sentenced, according to a review of his tribunal records.