NewsletterWho’s Suing Strategy and Why? Michael Saylor’s Firm Faces Lawsuit over Bitcoin Accounting
Highlights
- Strategy and CEO Michael Saylor are facing a class action lawsuit for allegedly misleading investors about Bitcoin risk and valuation.
- The lawsuit is filed by Anas Hamza and represented by Pomerantz LLP.
- Pomerantz invites investors who purchased shares between April 30, 2024, and April 4, 2025, to join the lawsuit.
Strategy (formerly known as MicroStrategy) is facing legal scrutiny as someone has filed a class-action lawsuit against the firm. The lawsuit is lodged in Virginia’s Eastern District court and is based on Michael Saylor’s Bitcoin valuation and alleged misleading of investors.
Who is Suing Michael Saylor’s Strategy?
According to the Virginia District Court filing, Anas Hamza, individually and on behalf of others in similar condition, has filed a lawsuit against Strategy and its CEO, Michael Saylor, President Phong Le, and Andrew Kang. The plaintiff is represented by a New York law firm, Pomerantz LLP.
Pomerantz says the firm focused entirely on its positive results, such as BTC Yield and gains, but never disclosed any real dangers to investors, misleading them. Saylor is a Bitcoin advocate and has led the firm to adopt BTC as a treasury reserve asset.
With this perspective, Saylor’s firm now holds 597,325 BTC, equivalent to $64 billion. Its share price has grown by more than 3000% in 5 years and by 204% in 2024. More importantly, many other corporations and institutions have begun following these strategies.
Additionally, Saylor has also become one of the most treasured personalities in the crypto space and is loved by all. However, the same following has brought them a lawsuit at their door.
Strategy Lawsuit: Why It’s Getting Sued?
The plaintiff alleges that the company misled them by overstating the profitability of their investment in the digital asset. More importantly, they concealed key risks, including volatility and accounting impacts.
Additionally, the filings highlight the firm’s newly adopted FASB accounting standard (ASU 2023-08), which requires fair value accounting for crypto assets. Under this model, they should have disclosed a $5.9 billion unrealized loss in Q1 2025, which they allegedly did not disclose. When they finally disclosed, its stock price dropped 8.67%, impacting investors.
Pomerantz claims that the firm failed to disclose the impact of new accounting standards and downplayed risk to investors.
Key Dates on Strategy Lawsuit and Jurisdiction
The plaintiff has filed a complaint against the firm and the CEO in the Eastern District Court of Virginia, covering investors who bought shares between April 30, 2024, and April 4, 2025. Their main allegations are around Strategy’s promotion of Bitcoin gains, but downplayed risks, like:
- Bitcoin price volatility
- Impacts of new accounting rules
- Large size unrealized loss
Pomerantz has announced that other affected investors can also join the class action suit until July 15.
Frequently Asked Questions (FAQs)
1. What are the main allegations in the class-action lawsuit against Staretgy?
2. Who can join the lawsuit?
3. What’s the last date to join?
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