Class-Action Lawsuit Targets Strategy Over Alleged Misleading Bitcoin Investment Claims

On July 3rd, the Pomerantz law firm initiated a class-action lawsuit against Strategy (formerly MicroStrategy), led by Michael Saylor, alleging violations of federal securities laws. The suit, filed in the Eastern District of Virginia, targets the period from April 30, 2024, to April 4, 2025, and invites other investors to join by July 15th. The complaint centers on claims that Strategy misrepresented the profitability of its Bitcoin investment strategy and its fund management operations, while minimizing the inherent volatility risks associated with Bitcoin.

Key allegations highlight that Strategy failed to properly disclose the financial impact of the new accounting standard ASU 2023-08. This standard led to a reported $5.9 billion in unrealized losses on digital assets in Q1 2025, which triggered an over 8% decline in the company’s stock price. The lawsuit asserts that Strategy selectively emphasized Bitcoin gains, obscuring the substantial losses recognized under fair value accounting principles, raising concerns about transparency and investor protection.

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