Saylor, MicroStrategy settle $40M tax fraud case without admitting guilt

According to a press release issued on June 3, Washington, D.C. Attorney General Brian Schwalb announced that he has reached a settlement agreement with Michael Saylor and his company MicroStrategy in a historic $40 million tax fraud case.

Schwalb pointed out:

“Billionaire tech industry executive and investor Michael Saylor will pay a $40 million fine to Washington, D.C., setting a record for the largest individual income tax fraud recovery in D.C. history. Saylor did not violate the law, but openly flaunted his tax evasion behavior and induced others to follow suit. "

Despite the settlement, Saylor and MicroStrategy denied any wrongdoing. They said the purpose of signing the agreement was to avoid further legal disputes and reduce the burden of litigation.

Saylor is a strong supporter of Bitcoin, and MicroStrategy holds more than 200,000 BTC, worth approximately $14 billion.

Tax Fraud

The settlement stems from allegations that Saylor evaded more than $25 million in income taxes while living in Washington, D.C.

The attorney general's office accused Saylor of conspiring with MicroStrategy to file false tax documents between 2005 and 2021 that falsely reported that he lived in Virginia or Florida, which have lower tax rates.

However, Schwalb claimed that Saylor lived in "a 7,000-square-foot tenement apartment with multiple yachts moored in Washington Harbor," and further asserted:

"Saylor is accused of living a lavish lifestyle in Washington, D.C., while illegally claiming to live in a lower-tax area to evade tax liability on hundreds of millions of dollars in income."

MSTR stock rises

Meanwhile, shares of the Bitcoin development company MicroStrategy (MSTR) were unaffected by the settlement.

According to data from Yahoo Finance, MSTR's stock rose about 7% on the day and was trading at $1,627 at press time. This continues a positive trend that has seen Bitcoin-related stocks rise 133% this year.

It is worth noting that the company’s shares were included in the MSCI Global Index, and BlackRock, the world’s largest asset management company, purchased 4,020 MSTR shares worth approximately $6.5 million.

Conclusion：

Despite facing charges of tax fraud, Michael Saylor and MicroStrategy settled by paying a $40 million fine while denying all wrongdoing. However, this incident did not affect the positive performance of the company's stock, and MSTR's stock price continued to rise after the settlement, demonstrating the market's confidence in the company.

At the same time, as a staunch holder of Bitcoin, MicroStrategy’s investment strategy and market performance deserve investors’ attention.

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