The top Democrat on the Senate Finance Committee has accused a prominent crypto investor of refusing to cooperate with an investigation into an alleged billion-dollar tax evasion scheme running through one of the digital asset community’s most popular enclaves: Puerto Rico.
Sen. Ron Wyden (D-OR) first opened an investigation into the finances of Pantera Capital founder Dan Morehead in January, as part of a broader inquiry into how “ultra-high net worth” Americans have used Puerto Rican residency as a means to obtain lucrative tax exemptions.
Wyden had not previously publicly announced that investigation until now, however. This week, the senator blasted Morehead in a published letter accusing the hedge fund manager and crypto investor of refusing to cooperate with the Senate’s investigation into his finances.
“While your attorneys initially suggested to my staff you were willing to cooperate with this inquiry, they have all but disappeared,” Wyden wrote, “heightening my concerns that you may have improperly avoided over $100 million dollars in federal taxes on capital gains that accrued while you still lived in San Francisco.”
The letter, sent to Morehead on Tuesday, said the crypto-focused venture capitalist may have received improper tax counsel which led him to obtain Puerto Rican residency shortly before earning hundreds of millions of dollars on the sale of a large Pantera position, and then declare that income exempt from U.S. taxes.
Wyden argued this was an incorrect interpretation of Puerto Rican tax law, which he said requires new residents of the island territory to pay U.S. taxes on such transactions for 10 years following their move.
“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 wrote.
Morehead did not respond to Decrypt’s request for comment on this story.
As the Trump administration has moved aggressively to create favorable conditions for crypto companies and investors, Morehead’s Pantera Capital has spun up several new ventures to take advantage of the moment.
The firm has spent hundreds of millions of dollars investing in Wall Street-traded digital asset treasury companies, which have taken off in popularity this year amidst promises of lucrative, risky returns. It recently launched a $1.25 billion effort to convert a publicly traded neurotechnology company into a massive Solana treasury.
Earlier this week, the company, Helius Medical Technologies—which once created medical devices designed to improve the lives of people with neurological diseases—formally changed its name to Solana Company. Tabs on the company’s website titled “Our Technology” and “Our Research” appear to have been deactivated.