Strategy Sued Over Misleading Profit Claims in $59B Treasury Bet

Strategy, a major Bitcoin-focused intelligence firm led by Michael Saylor, is now facing serious legal trouble. A group of investors has filed a class action lawsuit against the company. The plaintiffs accuse Strategy of making false and misleading statements about its profits and the risks associated with its large Bitcoin holdings . The lawsuit covers events that took place between April 2024 and April 2025. Investors Claim Strategy Hid the Real Risk The lawsuit in the U.S. District Court for the Eastern District of Virginia targets Strategy and its top executives. It names explicitly co-founder Michael Saylor, CEO Phong Le, and CFO Andrew Kang. Investor Anas Hamza, represented by the law firm Pomerantz LLP, is leading the lawsuit. The class action alleged that Strategy presented an overly optimistic view of its financial health while concealing key risks. According to the complaint, the software intelligence firm gave investors the impression that its Bitcoin -focused strategy would be highly profitable. However, the company allegedly downplayed the risk of the coin’s sharp price swings. When Bitcoin’s value dropped, investors say they suffered major losses. Strategy’s Shift in Accounting Raised New Questions In early 2025, Strategy started using a new accounting rule called ASU 2023-08 in compliance with the Financial Accounting Standards Board. This rule demands that companies show both gains and losses in the value of their crypto, based on market prices each quarter. Before adopting this rule, the Nasdaq-listed firm Strategy only reported losses when Bitcoin dropped, but did not show gains unless it sold the Bitcoin. After implementing this change, Strategy began showing big profits and strong Bitcoin results. Now, investors are arguing that the reports were misleading. They believe the company did not clearly explain the risks or possible losses associated with the new rule. Strategy Responds to Lawsuits, Stock Price Jump Strategy replied to the lawsuit in a public filing with the U.S. Securities and Exchange Commission (SEC). The company said it plans to fight the claims, but it cannot predict the case’s outcome yet. Strategy currently holds 576,230 Bitcoins, worth over $59 billion. The company bought those coins at an average price of $69,726 each, spending about $40.2 billion. According to CoinMarketCap data, Bitcoin is trading at about $104,000, showing strong growth. Experts believe the digital asset will go even higher, saying it is still in the acceleration phase. Even with the lawsuit in the news, Strategy’s stock (MSTR) went up by 1.8% as of Monday. Investors and the crypto community are waiting to see what happens next. The post Strategy Sued Over Misleading Profit Claims in $59B Treasury Bet appeared first on TheCoinrise.com .

Source: The Coin Rise