Pantera Capital Dan Morehead Under IRS Scrutiny for 850 Million Tax Dodge

- Dan Morehead accused of avoiding $850 million in taxes after moving to Puerto Rico - IRS investigation underway amid stricter cryptocurrency tax regulations [Unblock Media] Dan Morehead, founder and managing partner of cryptocurrency investment firm Pantera Capital, is under investigation for potential violations of federal tax law following his relocation to Puerto Rico. The U.S. Senate Finance Committee (SFC) raised concerns on January 9 that Morehead may have avoided over $850 million in investment gains from U.S. taxes by establishing residence in Puerto Rico. The investigation is centered around Puerto Rico’s Act 22 (now Act 60), which allows capital gains earned in the mainland U.S. to be tax-exempt if moved to Puerto Rico. However, the Internal Revenue Service (IRS) maintains that income generated within the U.S. remains taxable. The SFC is examining whether Morehead’s investment gains were genuinely generated in Puerto Rico or originated in the U.S. In response, Dan Morehead stated, “I believe I have complied appropriately with my tax obligations,” adding that he relocated to Puerto Rico in 2021. This investigation comes amid a broader tightening of cryptocurrency-related tax regulations. In June 2024, the IRS introduced new rules requiring U.S.-based centralized exchanges (CEXs) and brokerage firms to automatically report customers’ digital asset transactions. Beginning in 2025, these regulations will make cryptocurrency trades on CEXs subject to tax reporting, potentially prompting some investors to shift to decentralized exchanges (DEXs) to avoid regulatory scrutiny. Historical trends indicate that DEX usage increases during periods of regulatory tightening. Following the collapse of FTX in 2023, Uniswap and similar DEXs saw a surge in trading volume. A Chainalysis report also suggests that DEX activity rises whenever regulatory measures intensify. Experts predict that once the IRS regulations take effect, DEX trading volume could increase from the current 17–20% to over 30%. Meanwhile, Pantera Capital, which is at the center of this investigation, remains a major player in the crypto investment space with over $5 billion in assets under management. The firm has invested in more than 100 blockchain startups, allocating 47% of its capital outside the U.S. It is also expanding Web3 infrastructure investments in Asia and Europe, while actively backing projects integrating AI and blockchain technology. Beyond Morehead’s personal tax issues, the SFC’s investigation is seen as part of a broader regulatory effort to address tax avoidance strategies involving Puerto Rico. As the IRS tightens regulations, the evolving investment strategies of cryptocurrency market participants and the corresponding legal responses will be closely watched.