MicroStrategy, a technology firm led by pro-Bitcoin founder Michael Saylor, has reached a $40 million settlement to resolve a lawsuit accusing Saylor of evading income tax. The settlement, announced on June 3 by the attorney general for the District of Columbia, marks the largest recovery of income tax fraud in the district’s history. This lawsuit is the first to be filed under the district’s amended False Claims Act, which encourages whistleblowers to report tax evasion by residents who conceal their residence information.
The District of Columbia initially sued Saylor and his company, MicroStrategy, in August 2022, alleging that Saylor had not paid any income taxes in the district for the past decade despite residing there. The claims stated that MicroStrategy facilitated Saylor’s evasion of over $25 million in D.C. income tax. Initially, experts estimated that Saylor could face penalties of up to $75 million.
As a result of the tax fraud suit, Saylor stepped down as CEO of MicroStrategy in August 2022, 33 years 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 relinquishing the CEO 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, the company owned a total of 214,400 BTC, acquired at an average purchase price of $35,000 per BTC, amounting to a total cost of approximately $7.5 billion.
Saylor has gained recognition as a prominent Bitcoin advocate and technology enthusiast due to his substantial investments and active involvement in Bitcoin-related activities on social media. While he may not have been an early adopter of Bitcoin, his journey to becoming a Bitcoin billionaire began in 2020 when he personally bought 17,732 BTC for $175 million. Prior to this, Saylor had expressed skepticism about Bitcoin’s future, stating in 2013 that it was at risk of being regulated out of existence due to the lack of a credible sponsor.
Saylor’s influence in the cryptocurrency community has led to frequent invitations to speak at industry conferences, solidifying his reputation as a key figure in the space.