Dan Morehead, founder and managing partner of crypto investment firm Pantera Capital, is reportedly under investigation for potential federal tax law violations after moving to Puerto Rico, a well-known tax haven.
In a letter received on Jan. 9, the US Senate Finance Committee (SFC) requested information on over $850 million in investment profits Morehead earned after relocating to Puerto Rico in 2020.
Morehead “may have treated” these profits as exempt from US taxes, according to a Jan. 9 letter from Senator Ron Wyden seen by The New York Times.
According to the letter, the SFC was investigating tax compliance among wealthy Americans who moved to Puerto Rico and may have improperly applied a tax break to avoid paying taxes on income earned outside the island.
“In most cases, the majority of the gain is actually U.S. source income, reportable on U.S. tax returns, and subject to U.S. tax,” the letter reportedly states.
“I believe I acted appropriately with respect to my taxes,” Morehead said in a statement, adding that he moved to Puerto Rico in 2021.
Pantera Capital, founded by Morehead, was the first cryptocurrency fund in the US and has seen its initial investments grow by more than 130,000%, he wrote in a blog post on Nov. 26, 2024.
Morehead launched Pantera Bitcoin Fund in July 2013, making a lifetime return of more than 1,000 times the return on its first Bitcoin purchase at $74, he said. He added that 1% of financial wealth hadn’t come across Bitcoin at the time.
Pantera Capital holds over $5 billion worth of assets under management, with over 100 venture investments and 47% of its capital invested outside the US, according to the company’s homepage.
Crypto taxes attract regulatory attention worldwide
The investigation into Morehead comes amid increased regulatory scrutiny of cryptocurrency taxes. In June 2024, the Internal Revenue Service (IRS) issued a new rule requiring US crypto transactions to be subject to third-party tax reporting for the first time.
Starting in 2025, centralized crypto exchanges (CEXs) and other brokers will start reporting the sales and exchanges of digital assets, including cryptocurrencies.
This decision could push crypto investors to decentralized platforms in a “paradoxical situation” that could make tax revenue harder to track, Anndy Lian, author and intergovernmental blockchain expert, told Cointelegraph.
Showcasing the crypto industry’s backlash, the Blockchain Association filed a lawsuit against the IRS in December 2024, arguing that the rules are unconstitutional because they include decentralized exchanges under the “broker” term, extending data collection requirements to them.
Source: https://cointelegraph.com/news/pantera-capital-founder-tax-investigation-crypto
Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.
Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.
An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.
