Pantera Capital Founder Faces Tax Probe Over $850M Crypto Profits
- Senate Finance Committee probes $850M crypto profits, tax exemption claims.
- Dan Morehead defends tax actions, moved to Puerto Rico in 2021.
- Blockchain Association sues IRS over expanded data collection rules.
Pantera Capital founder Dan Morehead faces a U.S. Senate investigation over potential tax violations. The inquiry examines whether he improperly claimed tax exemptions by relocating to Puerto Rico.
Senate Investigates Crypto Tycoon
Dan Morehead, founder of Pantera Capital, is under investigation by the U.S. Senate Finance Committee (SFC) over potential tax violations. The probe focuses on $850 million in profits Morehead earned after moving to Puerto Rico in 2020. The committee questions whether he improperly applied tax breaks meant for residents of the island to exempt U.S.-sourced income.
The SFCs letter, dated January 9, highlights concerns that Morehead may have treated the profits as exempt from U.S. taxes. SFC suggests that the income could have been earned outside Puerto Rico, which is subject to U.S. tax and may have been improperly excluded. The committee is scrutinizing the tax compliance of wealthy Americans who have moved to Puerto Rico, a known tax haven.
Morehead, however, has defended his actions, stating he acted appropriately about his taxes. He noted that he moved to Puerto Rico in 2021 and emphasized that he complied with relevant tax laws. The Senates investigation continues to focus on whether his tax filings complied with U.S. requirements.
Pantera Capital, which Morehead founded, was the first cryptocurrency fund in the U.S. and has seen substantial growth. The firm manages over $5 billion in assets and has made significant investments in the crypto industry. In a recent blog post, Morehead mentioned that his firms investments had seen growth of more than 130,000%.
Crypto Taxes Crackdown
The investigation into Moreheads tax compliance comes amid a broader crackdown on cryptocurrency taxes. U.S. regulators have ramped up their scrutiny of crypto transactions, with new IRS rules taking effect in 2025. These rules will require centralized crypto exchanges to report transactions to the IRS for the first time, adding pressure on investors.
Meanwhile, some in the digital assets industry have expressed concern over the growing regulatory burden. The Blockchain Association has filed a lawsuit against the IRS, challenging the new rules. It argues that the expanded definition of brokers could extend data collection requirements to decentralized exchanges, complicating compliance for many in the sector.
The SFCs investigation signals an increased focus on tax compliance within the crypto industry. The scrutiny of Pantera Capital and Morehead comes at a time when regulators are increasingly turning their attention to crypto profits.
Read more: https://www.tronweekly.com/us-senate-probes-dan-morehead-over-crypto-tax/
Text source: TronWeekly
