Michael Saylor’s Legal Trouble Gives Ammunition to Web3 Critics
Is centralizing credibility and reputation in the hands of singular individuals a poor marketing system for Web3 moving forward?
Tax trouble for the Bitcoin Prophet
Michael Saylor, the Asco-founder and executive chairman of MicroStrategy (MSTR), is a prominent figure in the Bitcoin community, known for his unwavering conviction in his company’s nearly $4 billion Bitcoin investment and his social media bravado. Though familiar with the spotlight, the position in which he now finds himself may be less than comfortable.
Recently, Saylor has fallen into legal trouble for alleged tax fraud. Tributum, LLC, has filed a lawsuit on behalf of itself and the District of Columbia against Michael Saylor pursuant to the False Claims Act and common law. In 2020 D.C. amended the False Claims Act to allow qui tam plaintiffs – citizens filing claims on behalf of the government – to bring False Claims Act action relating to violations of District tax laws.
The claim alleges Saylor was domiciled or maintained a statutory residence in Washington D.C. from 2013 to 2022 – subjecting him to the jurisdiction's tax liability. Saylor, claiming to reside in Florida, has not filed or paid taxes in D.C. throughout this time. The suit relies on flight history and social media posts in addition to Saylor’s own comments, allegedly bragging to friends about tax evasion. The plaintiff is requesting Saylor pay treble statutory damages – not less than 3 times the amount of damages awarded at trial because of his violations of the False Claims Act.
It is obvious this claim is a serious problem for Saylor, but it may also exacerbate the existing stigma of cryptocurrencies being used for fraudulent activity. With Saylor being such a prominent spokesperson for the Bitcoin community (and BTC being the original and most widely recognized cryptocurrency), these accusations of fraudulent activity reflect poorly on the larger Web3 community.
Furthermore, the complaint references a video where Saylor appears to be discussing how Bitcoin can be used to evade taxes. The Web3 community may need to reconsider whose voices we elevate if we are to assure regulators and critics that cryptocurrencies are not used solely or primarily for illicit purposes.
Question: Is centralizing credibility and reputation in the hands of singular individuals a poor marketing system for Web3 moving forward?