45-year-old trader Waylon Wilcox pleaded guilty in a case involving the submission of false tax returns, resulting in him concealing nearly $13 million in profits from trading the CryptoPunk NFT collection. The charges were brought by the U.S. Attorney’s Office for the Eastern District of Pennsylvania.
This is reported by Finway
In 2021, Wilcox sold 62 CryptoPunk tokens, earning $7.4 million, and in 2022, he sold another 35 tokens, making $4.9 million. However, in his tax returns, he significantly underreported his income, thereby reducing his tax liability by more than $3.2 million.
Details of the Investigation
In the submitted returns, the trader drastically reduced his taxable income, claiming he did not engage in transactions involving digital assets. The U.S. Department of Justice reported that the maximum penalty for this offense is six years of imprisonment, followed by supervised release and a fine, although the specific length of the sentence has yet to be determined.
Combating Tax Violations
Investigators note that Wilcox’s case underscores the priority of combating tax violations related to virtual assets. The Internal Revenue Service (IRS) is actively monitoring schemes to conceal income from cryptocurrencies and NFTs. Special Agent Yuri Krutoy from the Philadelphia office stated:
“The IRS criminal investigation is aimed at uncovering complex financial schemes related to virtual currencies and NFT transactions designed to conceal taxable income”
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The investigation was conducted by specialists from the IRS and the Criminal Investigation Division, emphasizing the importance of equality before the law amid the growing digital asset market. It was also recently reported that the developer of the OpenSea platform has approached the U.S. Securities and Exchange Commission to clarify the status of NFT marketplaces.