Top Democrat Escalates Probe Into Pantera Founder Morehead’s Taxes

U.S. Senator Ron Wyden, the highest Democrat on the Senate Finance Committee, is constant his inquiry into whether or not Dan Morehead, the founding father of asset supervisor Pantera Capital, sought to keep away from paying taxes by means of his transfer to Puerto Rico.

Wyden’s probe into whether or not Morehead dedicated tax evasion started in January, and is targeted on how the Pantera founder reported taxes on his share of proceeds after a big crypto sale by the agency. According to a press launch, Wyden is particularly whether or not Morehead “misrepresent[ed] his residency status” when Pantera generated over $1 billion in capital positive aspects from crypto gross sales by claiming his earnings from the sale got here whereas he was in Puerto Rico. Residents of the U.S. territory don’t pay revenue tax on capital positive aspects.

“It is my understanding your share of these gains … was hundreds of millions of dollars,” Wyden stated in the letter, despatched on Wednesday. “It is also my understanding that you treated the entire [gain] as exempt from U.S. tax, even though the lion’s share of these gains accrued while you still resided in California. These are serious allegations of potential abuse of Puerto Rico tax incentives to avoid the payment of U.S. taxes that you must immediately address.”

Wyden’s letter alleged that Morehead’s attorneys “have all but disappeared” regardless of initially partaking along with his workers. He additionally stated within the letter that he believes Morehead was suggested by Jeffrey Rubinger, a Miami-based legal professional who suggested one other consumer who “recently pled guilty to a tax fraud scheme” tied to the identical Puerto Rico tax guidelines.

A Pantera spokesperson referred CoinDesk to a earlier assertion from Morehead, when he advised the New York Times in an announcement earlier this 12 months that, “I believe I acted appropriately with respect to my taxes.”

Wyden’s probe doesn’t carry the total weight of an investigation by the Senate Finance Committee in the mean time, given Democrats are the minority celebration within the Senate and committee Chair Mike Crapo — the highest Republican on the committee — doesn’t seem to have joined within the inquiry presently.

Wyden’s letter got here the identical day the Senate Finance Committee held a listening to on crypto tax points particularly. Witnesses on the listening to warned that the IRS might quickly face a deluge of tax reporting.

Read extra: U.S. Senate Hearing on Crypto Taxes Reveals Headaches for Both Industry and IRS