According to a review by the New York Times, the Senate committee investigated whether prominent cryptocurrency investors violated federal tax laws to save hundreds of millions of dollars after moving to Puerto Rico, a popular offshore tax haven. It's there.
Sen. Ron Wyden, an Oregon Democrat, wrote a letter on January 9th to Dan Morehead, founder of Pantera Capital, the largest crypto investment company.
The letter states that the Senate Finance Committee will be relocating to Puerto Rico to take advantage of a special tax credit for island residents that can reduce tax bills to zero. He said he is investigating the
According to the study, the study focused on people who inappropriately applied tax credits to avoid paying taxes on income earned outside of Puerto Rico.
“In most cases, the majority of profits are actually US withholding income, and can be reported on US tax returns and subject to US taxes,” the letter states.
The letter demanded detailed information on the investment return of approximately $855 million in the investment return he made after moving to Puerto Rico in 2020, and he may have “treated” the profits as a US tax exemption. He pointed out that it wasn't.
In a statement, Morehead said he moved to Puerto Rico in 2021. “I think I acted appropriately on taxes,” he said.
Wyden served as chairman of the Finance Committee until Republicans took control of the Senate last month. During his tenure, the committee examined several strategies that wealthy Americans used to avoid paying taxes.
It is unclear what comes from the investigation. Under the Biden administration, federal regulators and democratic lawmakers crack down on the crypto industry and prominent engineers. President Trump and Congressional Republicans have embraced the code and are committed to enforcement as aggressively.
A spokesperson for Wyden said the investigation was “ongoing” and declined to comment further. A spokesperson for Sen. Michael D. Krapo of Idaho, the new chairman of the Finance Committee, did not respond to a request for comment.
For more than a decade, wealthy Americans, including many high-tech entrepreneurs, flocked to Puerto Rico to take advantage of the tax deduction 60, which was founded under a different name in 2012. Capital gains income generated in US Territories is not subject to local or federal income tax.
In recent years, the Department of Justice, the Internal Revenue Service and lawmakers have been investigating the abuse of the system. The IRS says the criminal department has identified about 100 people who may have committed tax evasion.
Former Goldman Sachs trader Morehead founded Pantera in the early 2000s and turned it into one of the biggest crypto-focused investment companies, supporting more than 100 crypto companies in the past 12 years. I did. They include major US crypto companies such as Circle, Ripple and Coinbase, which operate the largest market for digital currencies in the US.
After Morehead moved to Puerto Rico, Pantera sold “a big position” and, according to Winden's letter, generated capital gains “over $1 billion.” Morehead's share of profits totaled more than $850 million, the letter said.
The letter asked Morehead to share information related to these transactions, including the names of his tax advisors. He also asked me to share a list of assets he sold.
