The District of Columbia’s Attorney General Karl Racine today revealed that Washington DC is suing former MicroStrategy CEO Michael Saylor for failing to meet his tax obligations. Racine shared details of the legal action in a series of tweets, disclosing that Saylor has resided in the District for over a decade without remitting the required income taxes.
The Bitcoin advocate faces tax fraud charges
The filed complaint, dated Aug 22, spelled that Saylor dodged tax responsibilities by falsely misrepresenting his residential area. The Bitcoin maximalist is said to have submitted his residential place as Florida or Virginia, evading taxes totaling more than $25 million.
“Michael J. Saylor has deprived the District of Columbia of tens of millions of dollars in tax revenue. [Saylor] knowingly avoided income taxes he owed by fraudulently claiming to be a resident of other, lower-tax jurisdictions while maintaining his domicile and place of abode in the District.”
The compliant divulged that then CFO at the firm came forward with the matter to Saylor because the firm couldn’t justify the fraudulent actions but the matter was quashed.
“MicroStrategy CFO, brought the issue of Saylor’s fraudulent evasion of District taxes to Saylor as a potential source of liability for the company. To assuage the MicroStrategy CFO’s concerns and in an attempt to reduce the likelihood that tax authorities would discover […] Saylor formed an agreement with the MicroStrategy CFO to reduce the salary MicroStrategy would pay to Saylor to a nominal $1.00.”
The AG also brought up charges against Saylor-founded MicroStrategy for abetting the Bitcoin bull in the scheme. Saylor responded to the suit saying that he disagreed with the allegations, which he looks forward to clearing in court. In a statement, MicroStrategy distanced itself from the same because it exists as an independent entity with no responsibility or oversight over Saylor’s personal and civil affairs.
Unexpected exit from MicroStrategy
The lawsuit against the ‘billionaire tech executive’ and his firm comes at a challenging time. MicroStrategy is one of the biggest Bitcoin public holders struggling to register profits due to poor Bitcoin performance. The company’s financial results for Q2 reported revenue of $122.1 million over the three months – about $3.9 million shy of projected revenue figure. The balance sheet additionally included a loss of $918.1 million, with the bulk of it attributed to the firm’s unwavering BTC hodling strategy.
Reports as of the end of June showed that the company held 129,699 BTC. Following Saylor’s resignation from the CEO position at the start of August, President and CFO Phong Le took over the executive role. Unconfirmed reports tied the decision to Saylor’s Bitcoin investment strategy, which he downplayed as a long-term plan to step down and take over as the Executive Chairman.
Cyber Capital founder brands Bitcoin technically one of the worst crypto
Founder and Chief Investment Officer of Cyber Capital, Justin Bons, recently criticized Bitcoin, saying it is only incredible in a vacuum and not when compared to other crypto assets. In a Twitter thread, the fund manager shared his view on the asset, which he pointed out remains a purely speculative asset lacking utility despite its dominant market capital among cryptocurrencies.
The Cyber Capital executive, who considers himself a crypto research expert, reflected on a time back in 2014 when there was a conversation on Bitcoin’s block size, to which the eventual solution saw a decision not to grow its limit. He argued that the same issue has left the sector where it is today – on a path away from “the original vision and purpose of Bitcoin.”
Bons said the decision was popular at the time because it was thought that increasing the block size would be a precedent for inflation, which has instead turned out to be the start of a significant long-term security failure. In terms of technological progress, the Cyber Capital CIO says Bitcoin lags as it lacks capacity, programmability, and composability. The crypto world today is flush with evolved blockchains, but Bitcoin lacks smart contracts, privacy-focused inventions, and scaling breakthroughs. Bons was, however, oblivious of the fact that the Bitcoin Lightning Network scales Bitcoin’s throughput massively.
He also wrote that Bitcoin is disadvantaged by its comparatively poor economic qualities. The likes of post-Merge ETH can achieve desirable implementations such as fee burning to achieve negative inflation. In his view, the current state of matters results from “irrational & emotional appeals to human greed.” He argued that the absence of fundamentals backing up Bitcoin’s value means that people only invest in it because they believe the price will eventually grow – speculation akin to that of a Ponzi scheme.
New Hampshire senatorial candidate advocates for BTC, labels the USD ‘a melting ice cube’
Despite harsh criticism, support for Bitcoin remains strong even among the political class. Senatorial candidate for New Hampshire Bruce Fenton recently spoke in support of the leading digital asset, insisting that there needn’t be governmental involvement in the regulation of the token.
Speaking during a debate for the New Hampshire primaries, Fenton said Bitcoin is one of the better options than the currently broken monetary model. He added the Federal Reserve’s tendency to print money against Bitcoin’s hard cap supply makes the US dollar less enticing. The New Hampshire senatorial candidate, who has been accepting crypto donations from figures including Jesse Powell of Kraken crypto exchange, singled out Bitcoin as one of his preferred alternative forms of money, adding that history has shown “people have figured it out, whether it’s gold or silver or Bitcoin.”
To learn more, visit our Investing in Bitcoin guide.
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