Dan Morehead Under Investigation for Potential Tax Violations
Dan Morehead, founder and managing partner of crypto investment firm Pantera Capital, is reportedly under federal investigation over potential tax law violations following his relocation to Puerto Rico, a known tax haven.
The US Senate Finance Committee (SFC) sent a letter on Jan. 9 requesting details about Morehead’s tax filings after he reportedly earned over $850 million in investment profits following his move in 2020. Senator Ron Wyden’s letter, seen by The New York Times, stated that Morehead “may have treated” these profits as tax-exempt under Puerto Rico’s tax incentives.
The SFC is examining whether wealthy individuals improperly applied tax breaks to avoid US taxes on income generated outside Puerto Rico. The letter reportedly notes, “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.”
Morehead has defended his tax practices, stating, “I believe I acted appropriately with respect to my taxes,” and confirming that he moved to Puerto Rico in 2021.
Pantera Capital’s Crypto Investments and Growth
Morehead founded Pantera Capital, the first cryptocurrency fund in the US, which has achieved an astonishing investment growth of over 130,000%, according to a blog post he published on Nov. 26, 2024.
Pantera assets under management. Source: Pantera Capital
He launched the Pantera Bitcoin Fund in July 2013, which has since delivered more than 1,000 times its initial investment. Morehead noted that when Pantera made its first Bitcoin purchase at $74 per BTC, only 1% of global financial wealth had been exposed to Bitcoin.
Today, Pantera Capital manages over $5 billion in assets, with more than 100 venture investments. Approximately 47% of its capital is invested outside the US, according to the firm’s website.
Global Scrutiny on Crypto Taxation Increases
Morehead’s case comes amid heightened scrutiny of cryptocurrency taxation worldwide. In June 2024, the US Internal Revenue Service (IRS) introduced new regulations requiring third-party tax reporting for cryptocurrency transactions.
From 2025, centralized crypto exchanges (CEXs) and other brokers will be required to report sales and exchanges of digital assets, including cryptocurrencies, to the IRS.
Experts believe this move could push investors toward decentralized platforms, making tax enforcement more challenging. Anndy Lian, an intergovernmental blockchain expert, described the situation as “paradoxical,” warning that increased oversight could drive users away from regulated exchanges.
The crypto industry has pushed back against these regulatory changes. In December 2024, the Blockchain Association filed a lawsuit against the IRS, arguing that the new rules are unconstitutional. The lawsuit challenges the classification of decentralized exchanges as “brokers” and criticizes the requirement to extend data collection to these platforms.
As tax authorities worldwide tighten their grip on cryptocurrency earnings, investors and firms alike are facing mounting pressure to comply with evolving regulatory frameworks.
