How Jonathan Mann Lost $3M from NFTs to Taxes and a Crypto Crash

- Musician Jonathan Mann earned $3 million from NFT sales. - A market crash and an IRS tax bill led to his significant financial loss. Musician and NFT artist Jonathan Mann, known for his "Song A Day" project, faced substantial financial difficulties after earning approximately $3 million from selling his back catalog of 3,700 songs as NFTs. Mann chose to hold onto the cryptocurrency proceeds, a decision that, combined with subsequent market events, led to significant financial issues. On June 7, 2025, Cointelegraph reported that Jonathan Mann sold his back catalog as NFTs on January 1, 2022, receiving payment in Ether (ETH). Mann and his wife decided to hold onto the cryptocurrency, anticipating its value would increase. However, the market value of ETH declined significantly in January 2022, and the subsequent collapse of the Terra ecosystem exacerbated the situation, contributing to a broader market crash. To compound their financial troubles, the U.S. Internal Revenue Service (IRS) approached Mann regarding taxes on his NFT earnings. The IRS taxed Mann's income based on ETH's value at the time of receipt, despite the cryptocurrency's subsequent decline in value. To avoid selling their ETH at a loss to cover the tax bill, Mann secured a loan through the Aave lending protocol, using some of his ETH as collateral. Unfortunately, the market crash triggered liquidations, resulting in Mann losing 300 ETH. After reviewing transactions with an accountant, Mann and his wife discovered they owed $1,095,171.79 in taxes. To prevent potential liens on their home and risks to his wife's retirement account, Mann decided to sell a rare Autoglyph NFT he had purchased earlier. Although his initial attempts to sell the Autoglyph on X (formerly Twitter) were unsuccessful, Mann eventually found a broker who facilitated a sale to a client for $1.1 million. This sale covered the tax debt, and because Mann had incurred losses from the Aave loan, he did not owe capital gains taxes on the Autoglyph sale. Despite these challenges, Jonathan Mann continues to create daily songs and sell them as NFTs, maintaining his ongoing creative efforts. On June 7, at 16:27 UTC, CoinMarketCap reported that Ethereum (ETH) was trading at $2,521.09, with its 24-hour trading volume showing a 0.259% change.