His Biggest Hit Was a Tax Bill: NFT Musician Lost $3M in Ethereum and Faced a $1.1M Tax Bill After Terra Crash Shattered His Portfolio

Musician Turns Crypto Collapse And $1.1M Tax Blow Into NFT Song

Jonathan Mann, known for his “Song A Day” project, transformed a financial nightmare into a musical confession after losing millions in the crypto crash.

Once riding high on the NFT wave, Mann watched a $3 million fortune vanish and ended up owing over $1 million to the US tax authorities.

Sold 3,700 Songs as NFTs, Then Watched ETH Plummet

On 1 January 2022, Mann entered the crypto space by selling his entire back catalogue — 3,700 songs — as non-fungible tokens (NFTs), pricing each at around $800.

The sales earned him roughly $3 million in Ethereum (ETH).

He and his wife, unsure of when or how much to sell, decided to hold onto the cryptocurrency, hoping the value would climb further.

However, ETH’s value began falling shortly after, with the Terra ecosystem’s collapse triggering a broader market crash.

The couple’s hesitation turned costly.

Mann admitted in a song he later posted on X, formerly Twitter,

“We didn’t have a plan.”

IRS Demanded Over $1 Million Despite Crypto Crash

While their ETH stash rapidly lost value, the Internal Revenue Service (IRS) still viewed the original earnings as income, based on the price of ETH at the time of receipt.

Mann sang,

“This is the story of how I made three million dollars and lost it, and how I owed the IRS more money than I made in 10 previous years.”

The couple eventually learned they owed $1,095,171.79 in taxes.

To avoid selling at a loss, Mann used some of the ETH as collateral to take out a loan via Aave, a crypto lending protocol.

But that too backfired.

The crash triggered a cascade of liquidations across decentralised platforms — including Mann’s loan — which wiped out 300 ETH in a flash.

He wrote,

“A lifetime of work erased in a moment.”

Rare NFT Sold to Pay Tax Bill

In a last-ditch effort to pay off the IRS, Mann sold one of his most valuable assets — a rare Autoglyph NFT he had purchased in crypto’s earlier years.

After struggling to sell it on social media, he found a broker who secured a buyer for $1.1 million.

Because of the significant losses from his liquidated Aave loan, Mann confirmed there were no additional capital gains taxes from the Autoglyph sale.

He said in the closing line of his song,

“It felt so bittersweet to be done.”

Still Writing Songs Despite Financial Setback

Despite losing millions and selling off prized digital assets to cover taxes, Mann remains committed to his craft.

He continues composing and uploading a new song each day, selling them as NFTs, holding on to hope that lightning might strike twice.

His experience is now immortalised not just in tax filings and transaction records — but in song.