Dispatch #103: Washington D.C. Goes After Saylor

Sep 02, 2022 3 min read

Dispatch

In this patch of your weekly Dispatch:

Michael Saylor is being accused of tax fraud
FASB crypto accounting standards en route
A new era in crypto energy politics

The Big Idea

They’re Coming for Saylor

Here’s one we didn’t see coming: Michael Saylor, aka the (former) CEO of MicroStrategy, aka the Bitcoin Treasury guy, is being sued by Washington, D.C. for tax fraud.

Basically, they’re saying that, although he claims to live in Florida, he actually spends enough time in DC that he should be paying taxes there – to the tune of $25M or more. The suit is also going after his company for conspiring with him regarding tax evasion.

On the one hand, this is a fairly common jurisdictional tax-type issue. On the other, the fact that the case originated from a whistleblower under D.C.’s False Claims Act has some speculating that the case is personally motivated or even an attack on Bitcoin.

The suit itself points to very public podcasts where Saylor lauded BTC’s ability to help people avoid taxes. Corporate PR is probably not very happy about that one…

For the rest of us, it’s one more downer event but, hey, you can make sure you’re all good on the tax front if you don’t sell and just borrow instead.

The Latest In…

US Regulations

While the US political scene has mostly shifted its attention to the midterm elections, there were a surprising number of small US regulatory discussions this week. The Financial Accounting Standards Board is working on rules for how companies can account for and disclose their holdings of digital assets, but this week the WSJ reported that those standards won’t include NFTs or certain types of stablecoins.

Over on the Hill, a subcommittee chairman from the House Oversight Committee sent letters to a number of US crypto exchanges requesting information on how they deal with what he claims is growing fraud.

The Latest In…

The Global Crypto Scene

The US isn’t the only jurisdiction trying to wrestle with crypto. Just this week:

El Salvador’s Bitcoin bond was delayed again. A technology issue or lack of demand?
The president of Paraguay vetoed a crypto regulation bill that might have attracted miners.
South Korea’s central bank released a report arguing that the country’s 2017 ICO ban hadn’t worked.
The EU has voted down a Green Party-proposed study on cleaner mining techniques.

The Latest In…

The Nexoverse

This week in #PeopleFundamentals: Say hi to Emanuele Bolognesi, an almost-aerospace engineer, turned software engineer & crypto trader. Take it away, Emanuele. 💥
Wondering what’s so revolutionary about Nexo Pro’s liquidity aggregation? Learn from those who know best.
Twitter is cool but we prefer getting our latest crypto prices from the source. The source.

The Latest In…

Solana Accidentally Bricks Itself?

Ah, the ups and downs of building a new blockchain. OptiFi, a decentralized exchange built on Solana this week announced that it had accidentally shut down its program on Solana’s mainnet, effectively bricking itself and losing $661,000 of USDC forever. On the other hand, IoT web3 project Helium has proposed moving off of their own blockchain and on to Solana for potential performance gains. Just another week trying to build the future of web3, we guess?

The Week’s Most Interesting Data Story

Post Merge…

Post Merge …

One of the most interesting dimensions of the upcoming Ethereum Merge is the impact it might have on the energy politics surrounding the crypto industry. Right now, a hotly debated topic among regulators is the energy-intensive nature of proof-of-work mining. However, after the merge, the total percentage of the crypto market cap that will be secured by POW will be well under 50%. Will this prompt regulators to say “why can’t Bitcoin switch too?” Or will it make them more comfortable with the idea that, functionally, all new performant blockchains don’t share this particular externality of proof of work?