- Strategy acquires 7,390 BTC for $765M, faces class-action lawsuit.
- Executives accused of misleading investors about Bitcoin’s risks.
- Corporate Bitcoin strategy faces growing legal and financial scrutiny.
Strategy, formerly MicroStrategy, has been hit with a class-action lawsuit following its recent Bitcoin acquisition. The lawsuit accuses executives of the firm of misleading investors about the risks of Bitcoin investments. This comes after the company acquired 7,390 BTC for nearly $765 million and Bitcoin surged above $100,000.
In its latest filing with the SEC, MicroStrategy reported the purchase, which brings its total holdings to over 576,000 BTC, valued at $59.2 billion. Even though Bitcoin has a 16.3% year-to-date yield, the company is accused of a lack of sufficient disclosure about Bitcoin’s high volatility. The class-action suit, filed in the US District Court for the Eastern District of Virginia, accuses Strategy’s executives of making misleading statements about Bitcoin’s potential profitability.
The lawsuit accuses Strategy chairman Michael Saylor and other executives of failing to disclose risks associated with Bitcoin’s volatility. The suit alleges that the executives overstated the security of the company’s Bitcoin-focused investment strategy. According to legal experts, Strategy did not clearly inform investors about the risks involved in its strategy to use Bitcoin.
Corporate Bitcoin Strategy
In the past year, corporate interest in Bitcoin has surged, and several companies followed MicroStrategy’s lead. The firm’s aggressive Bitcoin acquisition strategy has influenced other companies to implement similar strategies. Top Win, a luxury watchmaker, recently announced a Bitcoin treasury strategy, which led to a 60% increase in its shares. Other companies across the world have adopted similar strategies.
The Bitcoin treasuries plan has raised concerns about their sustainability as a corporate strategy. Although Strategy’s Bitcoin holdings have appreciated by $19.2 billion, the company still faces a risk of a substantial loss.
Accounting Rules Raise Concerns
After rebranding as a “Bitcoin Treasury Company,” Strategy is now the largest corporate Bitcoin holder. The company uses the BTC Yield and BTC \$ Gain custom metrics to explain the success of its crypto strategy. The new 2024 accounting rules have, however, raised concerns about the transparency of the firm.
The ASU 2023-08 rule requires MicroStrategy to submit reports about the fair value of its Bitcoin assets every quarter. The new rule has made the company vulnerable to large unrealized losses if the price of Bitcoin falls sharply. The company’s Bitcoin acquisition plan has raised concerns, especially after it saw a $5.91 billion unrealized loss in Q1 2025.
Market participants continue to closely monitor how this lawsuit affects MicroStrategy’s business. The case could affect corporate Bitcoin treasuries management and the entire cryptocurrency market. Although Strategy has seen immense growth in its Bitcoin holdings, it is not clear if its approach is sustainable as digital assets remain volatile.
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