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Investors Sue Strategy Over Bitcoin Risk Disclosures
MicroStrategy, now operating as Strategy, faces a class-action lawsuit alleging it misled investors about risks associated with its substantial Bitcoin holdings. New York law firm Pomerantz LLP filed the suit in Virginia, claiming Strategy failed to adequately disclose vulnerabilities in its cryptocurrency strategy between April 2024 and April 2025.
The Accounting Rule Change
The lawsuit centers on Financial Accounting Standards Board (FASB) regulation ASU 2023-08, which requires companies to report crypto assets at fair value with unrealized gains and losses reflected in income statements. This replaced previous impairment-only accounting, forcing Strategy to disclose a $5.9 billion unrealized loss that triggered an 8% stock price decline.
Strategy's Bitcoin Accumulation
Under executive chairman Michael Saylor's leadership, Strategy has accumulated over 597,000 Bitcoin since 2020, making it the world's largest corporate BTC holder. The company's stock surged over 200% in the past year as Bitcoin prices rallied, inspiring imitators like Japan's Metaplanet.
Broader Implications
While Strategy maintains impressive performance metrics, the lawsuit highlights growing regulatory scrutiny of corporate cryptocurrency holdings. The case could establish precedent for disclosure requirements as digital assets become more integrated into corporate treasuries.
Investors have until July 15 to join the class action. The outcome may influence how publicly traded companies approach cryptocurrency investments and disclosure practices moving forward.
