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Wyden Questions the Opportunity Zone of Crypto Miners Using Tax Breaks

(Bloomberg) — Crypto-mining companies are the latest target of Senate Finance Committee Chairman Ron Wyden’s investigation into whether opportunity sectors are fueling investment and job creation in low-income communities.

The Republican-led 2017 tax overhaul provides capital-gains tax breaks to investors who develop real estate or fund businesses in thousands of census tracts designated as opportunity zones — incentives that grow in financially troubled areas. To promote investment. Weyden, a Democrat from Oregon, sent letters on Monday to Radivider Blockchain Opportunity Zone Fund LLC, Argo Blockchain and HCVT LLP, asking companies to answer a series of questions on crypto-mining projects in the Opportunity Zone that either they Or what their clients are currently investing in.

In letters obtained by Bloomberg News, the senator said he is “concerned by recent reports that companies involved in cryptocurrency mining may be seeking to avoid taxes without meaningfully benefiting distressed communities by using the Opportunity Zone program.”

More than 6,000 funds invested nearly $29 billion in opportunity areas as of 2019, according to Internal Revenue Service data cited in a November report from the U.S. Government Accountability Office. Wyden first introduced legislation to tighten the rules around opportunity areas and require more reporting to increase transparency.

The current lack of safeguards and transparency measures in the Opportunity Zone program “raises the possibility that taxpayers are subsidizing only companies involved in cryptocurrency mining,” he said.

The investigation follows a similar investigation into luxury real estate developments in the Opportunity Zone, in which Widen targeted Anthony Scaramucci’s hedge fund Skybridge Capital, accounting firm Baker Tilly and others.

© 2022 Bloomberg LP

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