Fears arise of mass Bitcoin liquidation after Michael Saylor gets sued for Tax Fraud. The possibility of mass Bitcoin liquidation from one of the biggest Bitcoin whales in the space has caused quite a buzz in the crypto community.
On August 31st, District of Columbia attorney general Karl Racine put out a statement through his Twitter account announcing that they will officially be filing a lawsuit against Bitcoin enthusiast and former Microstrategy CEO Michael Saylor, for tax fraud.
He explains in his tweet that for the past decade, Saylor had been living in the District of Colombia for more than 10 years without having paid any DC income taxes.
NEW: Today, we’re suing Michael Saylor – a billionaire tech executive who has lived in the District for more than a decade but has never paid any DC income taxes – for tax fraud.
— AG Karl A. Racine (@AGKarlRacine) August 31, 2022
Because of this, the District of Columbia will also be suing his company Microstrategy, for being a defendant and reportedly “conspiring to help him evade taxes he legally owes on hundreds of millions of dollars he’s earned while living in DC.”
“With this lawsuit, we’re putting residents and employers on notice that if you enjoy all the benefits of living in our great city while refusing to pay your fair share in taxes, we will hold you accountable.” Attorney General Karl Racine says.
This lawsuit accuses Saylor of not having paid $25 million in total of his taxes and because of this, they will be seeking to recover unpaid income taxes and penalties of which could total up to $100 million or more.
Effect On Bitcoin
With Michael Saylor known to be one of the biggest Bitcoin whales in the world, as well as an extremely prominent Bitcoin maxi, the news of this new lawsuit has shaken up the Bitcoin community slightly.
Michael Saylor has since denied these allegations of tax evasion, telling Virginia Business: “Although Microstrategy is based in Virginia, Florida is where I live, vote and have reported for jury duty, and it is at the center of my personal and family life.“
“I respectfully disagree with the position of the District of Columbia, and look forward to a fair resolution in the courts,” he continues.
Despite these denials, fears have been stirring in the community that if Saylor and Microstrategy were forced to pay this $100 million fine, they may be forced to liquidate some of their Bitcoin holdings to earn the cash for the fine, causing a mass liquidation of BTC.
Analyst at digital asset broker GlobalBlock, Marcus Sotiriou wrote about this issue saying: “As MicroStrategy is one of the biggest Bitcoin holders, crypto investors began to panic about whether Michael Saylor would have to liquidate some Bitcoin to pay for the consequential fines.“
These fears however, haven’t seemed to reflect on Bitcoin’s price much whatsoever. At the time of writing, BTC’s price is trading steadily at $20,000 per coin, an improvement from its $19,800 price on August 29th.