A Senate committee is investigating whether prominent cryptocurrency investor, Dan Morehead of Pantera Capital, violated federal tax laws to save hundreds of millions of dollars after moving to Puerto Rico, a tax haven. Senator Ron Wyden sent a letter to Morehead on Jan. 9, stating that the Finance Committee was looking into wealthy Americans improperly using a special tax break in Puerto Rico to avoid U.S. taxes on income earned outside the territory.
Morehead made around $850 million in investment profits after moving to Puerto Rico in 2020 and the committee is questioning if he wrongly claimed the gains as exempt from U.S. taxes. Morehead, who moved to Puerto Rico in 2021, claims he acted appropriately with respect to his taxes.
The investigation is ongoing and was initiated during Wyden’s chairmanship of the Finance Committee. The inquiry is part of broader efforts to crack down on tax evasion by wealthy individuals in the cryptocurrency industry. While it is unclear what will come of the investigation, previous instances of tax evasion related to Puerto Rico’s tax breaks have been identified by the IRS.
Since the establishment of Act 60 in 2012, many wealthy Americans have moved to Puerto Rico to benefit from tax breaks on capital gains income generated in the territory. Morehead, a former Goldman Sachs trader, founded Pantera Capital and became a major player in the cryptocurrency investment space, backing major U.S. crypto companies like Circle, Ripple, and Coinbase. This investigation is part of a larger crackdown by federal regulators and Democratic lawmakers on tax evasion in the crypto industry.
Source
Note: The image is for illustrative purposes only and is not the original image of the presented article.
