Senator Ron Wyden, the top Democrat on the Senate Finance Committee, is investigating Dan Morehead, founder of Pantera Capital, a major cryptocurrency investment firm, over potential tax violations.
Puerto Rico Tax Break Under Scrutiny
The investigation centers around Morehead’s move to Puerto Rico in 2020 and subsequent massive capital gains. The Senator’s letter alleges that Morehead may have improperly avoided US taxes on over $850 million in profits from Pantera Capital’s sale of a large asset position, generating over $1 billion in capital gains. The committee is looking into whether Morehead and others exploited Puerto Rico’s tax incentives, designed to boost the island’s economy, to avoid paying US taxes on income earned elsewhere. The letter emphasizes that a significant portion of these gains likely originated from US sources and should be subject to US taxes.
Morehead Denies Wrongdoing
Morehead maintains that he followed the law. He claims his tax practices were appropriate.
The Investigation’s Scope
The investigation is requesting detailed information from Morehead, including:
- Specifics of the transactions involved.
- The identities of his tax advisors.
- A list of all cryptocurrencies and other assets sold while residing in Puerto Rico.
The Senate Finance Committee is focusing on whether individuals are misusing Puerto Rico’s tax benefits to avoid their US tax obligations. The outcome of this investigation remains to be seen.
