Michael Saylor, chairman of MicroStrategy and a prominent Bitcoin advocate, has agreed to a $40 million settlement in a tax fraud lawsuit, according to Bloomberg. The lawsuit, filed by the attorney general’s office in Washington, D.C., accused Saylor of evading over $25 million in income taxes while living in Washington for more than a decade.

The lawsuit, initiated in August 2022, alleged that Saylor had “knowingly evaded tax payments.” Saylor had denied the accusations, claiming he was a resident of Florida. Despite this, the settlement reached is reportedly the largest income tax recovery in the District of Columbia’s history. Importantly, the agreement does not require Saylor or MicroStrategy to admit any wrongdoing.

MicroStrategy clarified that the tax issue was solely Saylor’s responsibility and that he was “not responsible for overseeing his tax obligations.” The company emphasized that it would not contribute to the settlement, and Saylor would bear the full cost. DC Attorney General Brian L. Schwalb highlighted the significance of the settlement, stating it underscores the principle that even the wealthiest and most influential individuals are not above the law.

Schwalb noted that Saylor had openly boasted about his alleged tax evasion in Washington, encouraging others to do the same. This settlement sets a precedent, emphasizing that no person, regardless of their wealth or power, is exempt from legal accountability.

Michael Saylor, a well-known Bitcoin enthusiast, has significantly benefited from the cryptocurrency's recent surge in value. As reported by Bitcoinist, since MicroStrategy began purchasing Bitcoin as a hedge against inflation, the value of its holdings has risen to approximately $13.5 billion as of the end of April. In the first quarter alone, the company acquired an additional 25,250 BTC, bringing its total holdings to 214,400.

Jeff Dorman, chief investment officer at digital asset management firm Arca, summarized Saylor’s strategy for MicroStrategy as selling stock or debt to buy Bitcoin. As Bitcoin’s value increases, so does the price of MicroStrategy’s stock (MSTR), allowing the company to sell more stock or debt and repeat the cycle.

Currently, Bitcoin is trading at $69,190, showing a 2% increase from its previous consolidation last week. In contrast, MicroStrategy’s stock price stands at $1,600, down from its March-end mark of $1,990.