Attorney General Karl A. Racine of the District of Columbia announced on Wednesday that he is suing Saylor for tax fraud as well as his employer, MicroStrategy, for assisting him.
By utilizing his business intelligence company, MicroStrategy, to purchase billions of dollars' worth of Bitcoin since 2020, Bitcoin evangelist Michael Saylor has shot to fame in the cryptocurrency world.
Saylor, meanwhile, is also no stranger to squabbles. The 57-year-old entrepreneur rose to prominence during the late 1990s dotcom bubble and is well known for having lost $6 billion in a single day during the subsequent meltdown.
Saylor is once more in the news for all the wrong reasons at this point.
Saylor is being sued for tax fraud, according to the District of Columbia's attorney general Karl A. Racine, who revealed the news in a thread on Twitter on Wednesday. Saylor is accused of evading taxes on "hundreds of millions of dollars" of income while he was a resident of the area.
Saylor's business, of which Racine is the founder and former CEO, will also be sued by Racine for "conspiring to help him escape taxes," Racine continued. According to a copy of the lawsuit provided to CoinDesk by the AG, Saylor allegedly lived in a Washington, D.C., penthouse while "masquerading" as a resident of Florida or Virginia.
Mark Lynch, the former CFO of MicroStrategy, is accused by the attorney general's office of lying about his residence to federal tax authorities, according to CoinDesk.
The lawsuit will be the first to be filed under the recently modified False Claims Act in D.C., which encourages informants to report citizens who circumvent tax regulations by lying about where they reside.
Racine added, "With this lawsuit, we're sending a message to citizens and employers that if you take full advantage of residing in our wonderful city while avoiding paying your fair amount in taxes, we will hold you accountable."
After the news was announced, the price of MicroStrategy's stock dropped as much as 7%, but it has since partially recovered. With Bitcoin's bear market having seen a nearly 60% year-to-date decline, the company was already having trouble this year.
The corporation borrowed a stunning $2.4 billion to purchase 129,699 Bitcoins for about $4 billion at an average cost of $30,700. With the holdings currently valued at around $2.59 billion, MicroStrategy has $1.39 billion in paper losses related to the bitcoin buys on its books.
MicroStrategy did not immediately respond to Fortune’s request for comment.
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