The top Democrat on the U.S. Senate Committee on Finance reportedly sent a letter informing Pantera Capital founder Dan Morehead that the crypto investor is facing a tax probe.
The New York Times reports that in a letter, Senator Ron Wyden (D-OR) asks Morehad to give detailed information about a large investment profit that he made after moving to Puerto Rico in 2020.
According to Wyden, the Finance Committee is investigating tax compliance by Americans who moved to Puerto Rico to take advantage of the special tax breaks that can reduce the residents’ tax to zero.
The probe focuses on people who may have abused the tax break to avoid paying taxes on income earned outside the territory.
Reads the letter reviewed by The New York Times,
“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.”
After Morehead moved to Puerto Rico, Pantera Capital, one of the largest investment firms focused on cryptocurrency, sold “a large position” and generated over $1 billion in capital gains. Wyden’s letter says Morehead “may have treated” his more than $850 million share in the gains as free from US taxes.
The letter also asks Morehead to provide information about the transactions, including the name of his tax advisors, along with the list of cryptocurrencies and other assets that he sold while living in Puerto Rico.
The Pantera managing partner says he did not violate US federal tax laws.
“I believe I acted appropriately with respect to my taxes.”
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