Key Points:
- The Senate Finance Committee is probing whether Pantera Capital founder improperly claimed tax exemptions on over $1 billion in capital gains after moving to Puerto Rico.
- The committee is scrutinizing whether Morehead misapplied a tax break to U.S.-sourced income, with a focus on $850 million in investment profits since 2020.
The New York Times reported that the U.S. Senate Finance Committee is investigating whether Pantera Capital founder Dan Morehead violated federal tax laws after relocating to Puerto Rico.
Read more: Pantera Capital TON Investment Is The Largest Fund Of The VC Company In Web3 Space
Senate Investigates Pantera Capital Founder Over Tax Exemptions With $1 Billion Capital
According to a letter from Senator Ron Wyden, the committee is examining Morehead’s capital gains exceeding $1 billion and whether he improperly claimed tax exemptions.
Puerto Rico has attracted numerous wealthy Americans, including tech entrepreneurs, due to Act 60, a tax incentive that allows residents to avoid local and federal taxes on capital gains. The committee is focused on whether individuals, including the Pantera Capital founder, misapplied the tax break to income earned outside the U.S. territory.
The investigation stems from Morehead’s reported $850 million in investment profits since his 2020 move to Puerto Rico. The Senate Finance Committee’s letter suggests he may have classified these gains as tax-exempt despite most of the income likely being U.S.-sourced and subject to federal taxation.
Morehead Defends Actions as Pantera Capital Maintains Strong Position
In response, the Pantera Capital founder stated that he moved to Puerto Rico in 2021 and asserted that he had acted appropriately concerning his taxes. His company, Pantera Capital, remains a major player in the cryptocurrency industry, managing $5 billion in assets.
The company has made early investments in prominent firms such as Circle, Ripple, and Coinbase, and nearly half of its capital is allocated outside the U.S. Morehead previously highlighted Pantera’s impressive investment returns in a blog post published in November 2024, stating that the firm’s early ventures had exceeded 131,000% returns.
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