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Pantera Capital founder faces tax probe over $850M crypto profits: Report

Pantera Capital founder faces tax probe over $850M crypto profits: Report

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”.

www.anndy.com
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MicroStrategy may owe taxes on $19B unrealized Bitcoin gains: Report

MicroStrategy may owe taxes on $19B unrealized Bitcoin gains: Report

Despite never selling any Bitcoin, MicroStrategy may have to pay taxes on its unrealized gains.

Michael Saylor’s MicroStrategy, the largest corporate Bitcoin BTCUSD holder, may have to pay federal income taxes on its unrealized gains, according to the Inflation Reduction Act of 2022.

The act established a “corporate alternative minimum tax” under which MicroStrategy would qualify for a 15% tax rate based on the adjusted version of the company’s earnings, according to Jan. 24 report in The Wall Street Journal.

Still, the US Internal Revenue Service (IRS) may create an exemption for BTC under President Donald Trump’s more crypto-friendly administration.

MicroStrategy’s holdings have surpassed 450,000 BTC, worth more than $48 billion, after the company bought $243 million of BTC on Jan. 13.

According to MicroStrategy’s portfolio tracker, the company’s Bitcoin holdings have an unrealized gain of over $19.3 billion.

The report comes six months after MicroStrategy agreed on June 3, 2024, to pay $40 million to settle a tax fraud lawsuit that had accused it and Saylor of tax evasion.

The attorney general of the District of Columbia sued Saylor and MicroStrategy in August 2022, alleging the executive had paid no income taxes in the district for at least 10 years while he lived there.

MicroStrategy and Coinbase push against corporate alternative minimum tax

MicroStrategy and cryptocurrency exchange Coinbase have pushed back against the corporate alternative minimum tax (CAMT) regulation.

The two firms have requested that the US Treasury and IRS adjust the final rule to exclude unrealized crypto gains from the adjusted financial statement income (AFSI) to “avoid serious unintended consequences to US corporations holding substantial cryptocurrency.”

The two firms wrote in a joint letter to lawmakers on Jan. 3:

“The unforeseen combination of CAMT and a newly promulgated accounting standard are creating unjust and unintended tax consequences… CAMT imposes a 15% minimum tax on the AFSI of any corporation whose AFSI averages at least $1 billion in the prior three-year period.”

“Because the standard affects a corporation’s AFSI, corporations that own enough appreciated crypto (or have enough other book income) to be subject to CAMT must now pay tax on unrealized gains in the value of that cryptocurrency,” the letter stated.

US crypto tax laws gain prominence after IRS issued crypto tax guidelines in 2024

Crypto tax laws gained increased investor interest in June 2024 after the IRS issued a new crypto regulation, which will make US crypto transactions subject to third-party tax reporting requirements 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.

According to the IRS, the decision aims to help investors “file accurate tax returns with respect to digital asset transactions” and to address potential noncompliance in digital currency.

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://www.tradingview.com/news/cointelegraph:83010f015094b:0-microstrategy-may-owe-taxes-on-19b-unrealized-bitcoin-gains-report/

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”.

www.anndy.com
j j j

How Blockchain Technology Is Transitioning From Hype To Practical Applications: Report

How Blockchain Technology Is Transitioning From Hype To Practical Applications: Report

Blockchain technology has moved beyond its peak in the innovation hype cycle, marking a significant shift over the past two to three years, according to a new report.

Global Uncertainties Shaping Innovation

The past five years have been anything but normal, marked by the global COVID-19 pandemic and escalating armed conflicts, the report by International Association for Trusted Blockchain Applications states.

These disruptions have fundamentally reshaped industrial priorities and policy agendas, particularly in the tech and IT sectors.

The energy price hikes following Russia’s invasion of Ukraine and the subsequent disruptions to global supply chains have necessitated a complete overhaul of industrial strategies.

“Blockchain technology is not at the top of the innovation hype cycle anymore, nor has it been for the last 2–3 years,” the report notes, attributing part of this shift to the cyclical nature of the industry, driven by the Bitcoin halving cycle every four years.

The Future Of Innovation

The report emphasizes that the next decade will see entire industries either thriving or struggling amid increasing cyber-criminal attacks, industrial asset threats, and a skilled labor shortage impacting hyper-automation and hyper-acceleration.

“Exponential technologies will have to deliver a lot more than parroting chatbots or meme coins,” the report states.

It argues for a thorough assessment of technological capabilities to ensure they serve as integral components of future industrial frameworks.

Blockchain’s Practical Capabilities

Blockchain technology, according to the report, offers several key capabilities: flexible transparency options, secure automation, a rich governance toolbox, strong cryptographic building blocks and efficient settlement capabilities.

These features make blockchain particularly suitable for registry use cases and enhancing sector-wide performance through gamification and new financing options.

“Blockchain technology can gamify the key performance tableau of entire sectors and bring new financing options and processes to drive efficiency across and in between industry sectors,” the report highlights.

It also points out that blockchain can enhance the resilience of infrastructures using on-chain logic and a unified tech stack.

Anndy Lian, an intergovernmental blockchain expert, praised key initiatives like EBSI, Catena-X, and DIVE for their potential to revolutionize sectors from supply chain to energy.

“The emphasis on sustainability and regulatory compliance is particularly commendable,” Lian said, adding that interoperability challenges and fostering a robust ecosystem of developers and entrepreneurs are crucial for maximizing blockchain’s impact.

Basile Maire, co-founder of D8X, emphasized the significant influence of regulatory landscapes on innovation.

“The report illustrates the transformative potential of tokenized assets in financial markets,” Maire noted, highlighting D8X’s role in this transformation by offering derivatives collateralized in tokenized yield-bearing tokens.

Michael Repetny, a core contributor at Marinade, said blockchain projects are no longer in a ‘hype’ phase.

“There are a lot more practical use cases and applicability across public and private sectors,” he said. Repetny also highlighted the role of regulatory frameworks like the EU’s MiCA in fostering growth and partnerships among blockchain projects,” he said.

Blockchain In Finance

The report underscores that blockchain has already made significant inroads into the heavily regulated finance sector.

It argues that the coming decade of exponential technologies will offer more financial leverage options, not fewer.

“It is not an echo of Silicon Valley’s techno-optimism – but if we extrapolate the trend of technological breakthroughs at various fronts, the demographic erosion of our educated workforces in the first world and our tumbling democratic foundation, then innovation is a must, not an option,” the report states.

 

 

 

Source: https://www.benzinga.com/markets/cryptocurrency/24/07/39891731/how-blockchain-technology-is-transitioning-from-hype-to-practical-applications-report

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”.

www.anndy.com
j j j