As early as August 2022, rumors circulated about possible trouble for MicroStrategy CEO Michael Saylor related to tax evasion. Now it comes news announced that the U.S. District Attorney’s Office for the District of Columbia has decided to proceed with a lawsuit against Saylor.
‘Never paid income tax’
Former Washington DC Attorney General Karl Racine announced a lawsuit against Saylor and MicroStrategy in August 2022, alleging that the co-founder “never paid any income taxes” and that the company “colluded” to aid him in tax evasion.
Authorities say the amount was more than $25 million in taxes, but including fines, the amount could be as high as $100 million. That is also a huge amount for someone like Michael Saylor.
It’s the 1st lawsuit brought under DC’s recently amended False Claims Act encouraging whistleblowers to report residents who evade our tax laws by misrepresenting their residence. Led by @ChmnMendelson, @councilofdc unanimously updated the law & gave us enforcement authority.
— Archive: AG Karl A. Racine (@AGKarlRacine) August 31, 2022
Incidentally, Racine has been out of office since January, after he announced that he would not seek re-election. The next meeting in the case against MicroStrategy and Saylor is scheduled for March 10. “The final outcome of this case cannot be predicted at this time,” the file reads.
Notably, in the same month, in August 2022, Saylor also stepped down as CEO of MicroStrategy. Of course, that only makes him more suspicious in this one, because why would you do something like that if you’re innocent.
MicroStrategy and bitcoin
It is hoped that this case will not have too great an impact on MicroStrategy, as the publicly traded company is still the largest bitcoin investor among companies. Since the initial purchase in August 2020, MicroStrategy has managed to collect a total of 130,000 bitcoin.
Unfortunately for MicroStrategy, the bitcoin price has dropped quite far below their average purchase price. In total, it paid about $4 billion for its bitcoin, while they are now worth around $2.9 billion. That’s a pretty steep drop.
While MicroStrategy still regularly made large purchases in the beginning, we don’t hear much from the company anymore. In that respect, it seems that there is little room left at co-founder Michael Saylor’s company to make new purchases.