Musicians earned $ 3 million with the sale of NFTs and then lost everything

The most important thing shortly

• At the beginning of 2022, Jonathan Mann sold 3,700 NFTs of his old songs and earned Ethereum worth around $ 3 million.
• The ETH Prize fell strongly after the Terra collapse, but the IRS taxed its profits based on the original value.
• Man owed over $ 1 million in taxes and lost hundreds of ETH through a credit liquidation on AAVE.
• He sold a rare autoglyph to pay for the IRS invoice and thus avoid lien on his house and the pension of his wife.
• From this experience, man made a warning music title and continued his project “Song a Day” with persistence.

Rising and falling of a NFT-happiness

When the crypto euphoria reached its peak in early 2022, Jonathan Mann, the artist behind the project “Song a Day”, was in top form. Known to upload a unique original song every day for over a decade, man jumped up on the NFT train by selling his entire back catalog with 3,700 songs. At a price of around $ 800 per piece and a payment in Ether (Eth), the sale earned an incredible $ 3 million.

But within a few months, his newly won assets fell. A hard combination of tax regulations, market errors and a catastrophic crypto crash converted man's unexpected money blessing into a nightmare. Now he tells his story in his best way – in songs.

6000 days.
6000 songs.

A story that almost broke me:

The $3 million I made and lost.
My $1.1 million tax bill.
The Autoglyph that saved me

This is SONG A DAY #6000

🌩️CRYPTO TAX NIGHTMARE🌩️

The journey continues below👇 pic.twitter.com/ufUKNPiMIH

— 17 years of song a day (@songadaymann) June 5, 2025

No plan, great risk: keeping ETH when the market slipped

It all started on January 1, 2022. Riding at the NFT wave, Mann sold 3,700 songs and received the proceeds of $ 3 million in ETH. Instead of exchanging the money into US dollars immediately, he and his wife decided to keep the cryptocurrency in the hope that the price would continue to increase.

After earning $3 million from NFT sales, Jonathan Mann watched it vanish in a crash, and now he’s turned the ordeal into a painfully honest crypto tax tune. pic.twitter.com/lD4kvhFkwt

— OurCryptoMiner (@OurCryptoMiner) June 8, 2025

But as man admits in his musical chronicle, they had no plan. When the Ethereum course started to fall later a month, they made themselves undecided. Instead of securing profits or taking advantage of the average cost effect, they held back, unsure what to do. In the meantime, the IRS was not preparing to send an invoice based on the original value of ETH.

The problem? US tax law considers cryptocurrencies from NFT sales as income. This means that you will be taxed with the dollar value at the time of maintenance, regardless of future profits or losses. In the case of men, this meant a seven-digit tax liability, although his ETH value had fallen 70 %.

Aave credit disaster and the Terra collapse

Crypto gains are rarely as simple as they seem, and Jonathan Mann just turned that hard lesson into a song.

The longtime musician, known for his “Song A Day” project, made headlines in 2022 when he sold his entire back catalog as #NFTsnetting $3 million in Ether.

But when… pic.twitter.com/rSWSER3BQT

– Harshajit Sarmah (@Whattheharash) June 8, 2025

Instead of selling his ETH with loss, the couple turned to defi. Mann secured his stocks via the Aave credit protocol to take out a loan. It was a great risk that collapsed in mid-2022 with the collapse of the Terra ecosystem and shook the entire cryptoma market.

The domino effect of the liquidations destroyed most of its collateral. Over 300 ETH disappeared from his wallet at lightning speed. A fortune and the work of a whole life were lost.

“The work of a whole life, wiped out at a moment.” – Jonathan Mann

Mann spent months with his accountant to disguise his defi transactions and calculate his tax debts. The final sum was breathtaking: $ 1,095,171.79 of owed taxes.

An NFT to save them all

In view of the lien on his house and the upcoming retirement of his wife, man made a desperate attempt to sell his rare NFT. It was an autoglyph, one of the first generative on-chain art projects by Larva Labs.

He tried to sell the stock directly via Twitter, but found no buyers. Finally, he contacted a broker who found a buyer who was ready to pay $ 1.1 million – just enough to cover the tax bill. Since he had lost so much with AAVE, there was no capital gains taxes for him so that he could get out of the tax ceremony tax -free.

NFT artist Jonathan Mann turned his tax troubles into a song after losing $3M during the Terra crash. He sold a rare NFT to settle a $1M IRS bill but stays optimistic.

Read the full article ⤵️ https://t.co/nmuSA1NZYV

– Nova – {News} Augent (@chagingPtaines) June 7, 2025

A hard lesson for crypto manufacturers

Jonathan Mann's story is reminiscent of one of the most frequently overlooked risks of crypto gains-the taxation according to the income value, not after cash. The volatility of cryptocurrencies in combination with defi strategies can turn a book profit into a real crisis.

Despite all of this, man web3 did not give up. He continues to make music every day and sells songs as NFTS. He hopes to create the big breakthrough again – this time with a plan and significantly more caution.

“That was not the end. I'm still here. I'm still singing. I still build. I still hope,” concluded man.

His career serves as a warning example for artists who get into the NFT area: What they earn with cryptocurrencies may not be what they keep and taxes are not waiting for anyone, whether bull or bear market.

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