MicroStrategy and its founder, Michael Saylor, have agreed to a $40 million settlement to resolve a lawsuit accusing him of evading income taxes.
The New York Times reported on June 3 that the attorney general for the District of Columbia reached this settlement with Saylor and his software company. Local officials assessed the agreement as the district’s largest income tax fraud recovery. This lawsuit was the first filed under the district’s amended False Claims Act, encouraging whistleblowers to report tax evasion by residents allegedly hiding their residency.
In August 2022, the District of Columbia sued Saylor and MicroStrategy, alleging that Saylor had not paid income taxes in the district for at least ten years while residing there. According to the claims, MicroStrategy helped Saylor evade more than $25 million in DC income tax. Initially, experts suggested that Saylor could face penalties of up to $75 million.
The lawsuit led to Saylor resigning as CEO of MicroStrategy in August 2022, 33 years after founding the firm. Despite stepping down as CEO, Saylor took on the role of executive chairman and continues to serve as chairman of the board of directors. Throughout this period, Saylor maintained MicroStrategy’s strong association with Bitcoin, frequently announcing new purchases on social media.
Microstrategy continues its Bitcoin Acquisitions
MicroStrategy has continued its Bitcoin acquisitions, with one of its recent significant purchases made in March 2024. The firm bought 12,000 BTC through an $800 million convertible note offering. As of May 1, 2024, MicroStrategy owned 214,400 bitcoins, bought at an average price of $35,000 per BTC, with a total cost of around $7.5 billion.
Michael Saylor’s journey to becoming a prominent Bitcoin advocate began in 2020 when he announced his purchase of 17,732 BTC for $175 million on Twitter. Before this, Saylor had been skeptical about Bitcoin, once suggesting that it was in danger of being regulated out of existence. However, his views shifted, and he emerged as a major proponent of Bitcoin, frequently speaking at industry conferences and engaging in significant Bitcoin-related activities on social media.
Since its establishment in 1989 by Saylor, MicroStrategy has become a prominent supporter of Bitcoin. In recent years, Bitcoin has become central to its business strategy, with the company possessing $13.6 billion in Bitcoin, accounting for 1% of the total cryptocurrency supply.
