Strategy, formerly MicroStrategy, has been hit with a class-action lawsuit over alleged misleading statements tied to its Bitcoin strategy.
The May 19 Lawsuit filing claims Strategy hid the associated risks, citing a $5.9 billion unrealized Q1 loss that triggered an 8.67% drop in MSTR shares during April 7 trading.
The “anticipated profitability” and “risks associated with Bitcoin’s volatility” were referenced as misrepresented by Strategy officials.
One focal point is the company’s repeated emphasis on key performance indicators like BTC Yield—tracking the ratio between Bitcoin holdings and common shares outstanding.
These metrics allegedly downplayed the risks tied to adopting a fair-value accounting model for its Bitcoin reserves.
Strategy chairman Michael Saylor, president and CEO Phong Le, and executive vice president and chief financial officer Andrew Kang are all defendants in the suit.
Strategy Continues to Buy, Other Firms Follow
As of May 18, Strategy holds 576,230 BTC acquired for around $40.2 billion at an average price of $69,726 per coin.
At current prices, the company’s total holdings are valued at more than $59.2 billion, representing an unrealized gain of $19.2 billion, or 47%.
Since the filing, Strategy continues to acquire Bitcoin with its latest 7,390 BTC purchase valued at $764.9 million.
A new projection by research and brokerage firm Bernstein suggests that corporations could collectively allocate as much as $330 billion into Bitcoin by 2029.
Bernstein analysts believe this surge will primarily be driven by public companies emulating MicroStrategy’s Bitcoin treasury strategy.
BitBO data further illustrates the growing institutional interest, showing that public companies now collectively hold more than 739,501 BTC worth over $68 billion.
Bitcoin treasuries by category. Source: BitBO.Speculators Fear the Strategy Lawsuit Could Prompt Further Enforcement Action
Commentators fear the Strategy lawsuit could set a precedent for broader enforcement, posing a threat to corporate Bitcoin treasuries.
Pseudonymous X analyst Vagada noted that the lawsuit could “test the legal frontier” of corporate Bitcoin adoption.
Others, however, argue the suit lacks merit. Pseudonymous developer 0xngmi from DeFiLlama criticized the case in a May 19 X post.
He dismissed claims of understated risks, stating, “You’re buying a company that is self-labelled as ‘leverage on Bitcoin,’ what do you expect?
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