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Bitcoin juggernaut Strategy is currently facing at least five copycat lawsuits alleging securities fraud related to its substantial Bitcoin treasury holdings.
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These lawsuits, filed by multiple law firms, accuse Strategy of making materially false and misleading statements about the profitability and risks of its Bitcoin acquisitions over an 11-month period.
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According to University of Michigan Law School professor Adam Pritchard, the number of suits is typical as law firms compete to secure lead counsel status, which can result in lucrative fees.
Strategy faces multiple securities fraud lawsuits over Bitcoin holdings; law firms compete for lead plaintiff role amid $63B BTC treasury scrutiny.
Multiple Securities Fraud Lawsuits Target Strategy’s Bitcoin Holdings
Strategy, formerly known as MicroStrategy, has become the focal point of at least five separate securities fraud lawsuits accusing the company of misleading investors about the risks and profitability of its Bitcoin investments. The lawsuits span an 11-month period from April 30, 2024, to April 4, 2025, and allege that Strategy made materially false and misleading public statements regarding its BTC treasury. This legal onslaught began with a class action filed by Pomerantz LLP on May 16, followed by identical suits from Gross Law Firm, Bronstein, Gewirtz & Grossman, Kessler Topaz Meltzer & Check, and Levi & Korsinsky.
Law Firms Jockey for Lead Plaintiff Status in High-Stakes Litigation
Legal experts explain that the proliferation of lawsuits is a common tactic in securities class actions. Law firms file multiple complaints to position themselves as lead counsel, a role that controls litigation strategy and can yield substantial fees. University of Colorado law professor Ann Lipton notes that the lead plaintiff “controls the litigation and selects counsel,” making the position highly sought after. The Private Securities Litigation Reform Act of 1995 prioritizes plaintiffs with the largest losses and institutional investors, who are deemed better equipped to oversee complex litigation.
Investor Stakes and Institutional Involvement in the Lawsuits
While Strategy co-founder Michael Saylor remains the largest individual shareholder with nearly 20 million shares valued at approximately $7.8 billion, several institutional investors hold significant stakes. Vanguard Group owns 8.55%, BlackRock and Capital International Investors each hold 5.8%, Susquehanna Securities has 4.8%, and Jane Street Group holds 4.7%. It remains unclear if these major investors have joined any of the competing class actions as lead plaintiffs.
Bitcoin Treasury Valuation and Impact on Company Financials
Strategy’s Bitcoin holdings, totaling 592,345 BTC, recently surpassed a valuation of $63 billion. However, the company disclosed nearly $6 billion in unrealized losses on these digital assets in its Q1 earnings report, warning investors of potential ongoing profitability challenges. The average purchase price for BTC in Q1 was $95,000 per coin, but the price dropped to around $82,000 by the earnings report date before rebounding to approximately $107,000. These fluctuations have intensified scrutiny and fueled the wave of litigation.
Company Response and Ongoing Legal Proceedings
Strategy has acknowledged the lawsuits in multiple SEC 8-K filings, emphasizing its intent to vigorously defend against the claims. The company has refrained from predicting the outcome or estimating potential losses related to the litigation. As the July 15 deadline approaches for appointing a lead plaintiff, the consolidation of these class actions under a single representative is anticipated, which will streamline the legal process and determine the trajectory of this high-profile case.
Conclusion
The surge of securities fraud lawsuits against Strategy underscores the heightened legal risks companies face when managing large cryptocurrency treasuries. While the number of suits is not unusual in such cases, the involvement of major institutional investors and the substantial valuation of Strategy’s Bitcoin holdings make this litigation particularly significant. Investors and market observers should monitor developments closely as the legal process unfolds and a lead plaintiff is appointed to steer the consolidated class action.
