MicroStrategy, a prominent technology company, and its founder Michael Saylor, known for his support of Bitcoin, have reached a $40 million settlement to resolve a lawsuit accusing Saylor of evading income tax. The agreement, reported by The New York Times on June 3, is considered the largest recovery in income tax fraud in the District of Columbia. This lawsuit marks the first under the district’s amended False Claims Act, which encourages individuals to report tax evasion by residents hiding their residence information.
The District of Columbia filed the lawsuit against Saylor and MicroStrategy in August 2022, alleging that Saylor had not paid income taxes in the district for at least a decade. The claims state that the company assisted Saylor in evading more than $25 million in D.C. income tax, and experts initially estimated that he could face $75 million in penalties.
As a result of the tax fraud suit, Saylor stepped down from his position as CEO of MicroStrategy in August 2022, three decades after founding the company. However, he immediately assumed the role of executive chairman and continued to serve as chairman of the board of directors.
Despite the change in his position, Saylor has remained committed to promoting MicroStrategy as a Bitcoin-friendly company. He regularly announces new Bitcoin purchases on his social media accounts. In March 2024, MicroStrategy made a significant purchase of 12,000 BTC through an $800 million convertible note offering.
As of May 1, 2024, MicroStrategy holds 214,400 BTC, which were purchased at an average price of $35,000 per BTC, with a total cost of approximately $7.5 billion.
Saylor has gained recognition as a major Bitcoin advocate and technology supporter due to his substantial investments and active involvement in Bitcoin-related activities on social media. He is a prominent figure in the cryptocurrency community and is frequently invited to speak at industry conferences.
Interestingly, Saylor was not always a believer in Bitcoin. In 2013, he expressed skepticism, stating that Bitcoin was at risk of being regulated out of existence. However, his journey towards becoming a Bitcoin billionaire began in 2020 when he announced his personal investment of 17,732 BTC for $175 million.
Overall, Saylor’s settlement with the District of Columbia marks a significant development in his ongoing relationship with Bitcoin and MicroStrategy’s position as a Bitcoin-friendly company.