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Dan Morehead, the founder of prominent crypto investment firm Pantera Capital, is under federal investigation for potentially violating U.S. tax laws following his relocation to Puerto Rico, according to a report from CryptoNews.
Sen. Ron Wyden, the top Democrat on the Senate Finance Committee, has alleged that Morehead may have improperly classified over $850 million in investment profits as exempt from federal taxes.
In a letter dated Jan. 9 and obtained by The New York Times, Wyden suggests that Morehead may have misapplied tax exemptions available to Puerto Rico residents, CryptoNews reported.
The investigation comes as the Senate Finance Committee (SFC) tightens its focus on high-net-worth individuals who moved to the island to avoid paying U.S. taxes on income sourced outside Puerto Rico.
In 2012, the government passed Act 20 and Act 22 to promote the exportation of services by companies and individuals providing such services from Puerto Rico and the relocation of high-net-worth individuals to Puerto Rico. The laws have since become part of Act 60.
According to Wyden’s letter: “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.”
Pantera Capital was the first U.S. crypto investment fund, and Morehead’s November 2024 blog post highlighted that the firm’s initial investments had grown by over 130,000%.
Pantera’s Bitcoin Fund, launched in July 2013, reportedly generated returns exceeding 1,000 times its initial bitcoin purchases at $74 per coin. The firm currently manages over $5 billion in assets, with almost half its capital invested outside the U.S.
The STAR could not reach Morehead, who has denied the allegations.
