One of the largest sellers of CryptoPunk NFTs has just pleaded guilty to tax evasion. This is an important precedent first for matters in the newly minted and fast-paced digital asset world. Thomas Carter Wilcox hid more than $13 million in income. Those earnings all came from the sale of just 97 CryptoPunk NFTs between 2021 and 2022.
As a result of Wilcox’s actions, he was able to avoid almost $3.3 million in taxes. Wilcox was charged by the U.S. Attorney’s Office for the Middle District of Pennsylvania.
CryptoPunks were developed as an experiment in decentralized art by Larva Labs. In 2022, Yuga Labs acquired them, and they currently remain the most valuable NFT collection by market cap. The NFT market has crashed from its 2021 highs, CryptoPunks have largely held their value. The demand—the dollar floor price of these NFTs—has slightly increased over the past half year. It has jumped more than $66,900 to $68,800. It has done so even amid ETH price volatility.
The IRS’s heightened interest in virtual currency and NFT transactions is underscored by this recent guilty plea.
IRS Criminal Investigation is committed to unraveling complex financial schemes involving virtual currencies and NFT transactions. - Yury Kruty, special agent in charge of the IRS’s Philadelphia field office.
Wilcox now faces a maximum sentence of six years in prison for the tax evasion. Unfortunately for his victims, his guilty plea could lead to a substantially lower sentence. The timing of Wilcox’s plea, just weeks before the April 15 tax filing deadline, highlights how compliance with the tax code is a serious and urgent matter.
