Lawsuit Against Strategy Ends Abruptly
A proposed class action lawsuit targeting Strategy and its executive chairman Michael Saylor has been withdrawn. The case, which accused the company of misleading investors about the risks tied to its large-scale Bitcoin holdings, was voluntarily dismissed by plaintiffs this week, according to Bloomberg.
Filed in May by law firm Pomerantz LLP in the U.S. District Court for the Eastern District of Virginia, the lawsuit also named CEO Phong Le and CFO Andrew Kang as defendants. Investors had argued that Strategy overstated potential Bitcoin gains while downplaying volatility risks and failed to adequately explain how new accounting standards would impact reported earnings.
The dismissal, filed on August 28, was made with prejudice, meaning the claims cannot be refiled. No public explanation was given for why the plaintiffs chose to retreat.
Bitcoin Accounting at the Core of the Dispute
Central to the lawsuit was Strategy’s adoption of the Financial Accounting Standards Board’s (FASB) Accounting Standards Update No. 2023-08. This new rule requires companies to report crypto assets at fair market value each quarter, with gains and losses flowing directly into net income.
Plaintiffs claimed Strategy failed to fully disclose how this accounting shift would affect its bottom line. They cited the company’s $4.22 billion net loss in Q1 2025 as evidence of misleading presentation. The argument suggested that investors were left without a clear picture of how volatile swings in Bitcoin prices could sharply alter Strategy’s financial statements.
Mounting Criticism Beyond the Courts
Even outside of litigation, Strategy has drawn sharp scrutiny. Earlier this month, a prominent Wall Street advisor criticized the company’s practice of comparing itself to Apple and Nvidia, arguing that such comparisons are misleading since Strategy’s performance is driven more by Bitcoin’s price movements than by operational revenue growth.
This skepticism underscores a growing divide in the financial world. Some view Strategy as an innovative model for corporate Bitcoin adoption, while others dismiss it as an unsustainable bet tied too closely to a volatile asset.
Strategy’s Bitcoin Position Remains Unmatched
Despite controversy, Strategy remains the largest corporate holder of Bitcoin globally. The company currently holds 632,457 BTC, valued at roughly $68.32 billion, according to BitcoinTreasuries.net.
Executive chairman Michael Saylor has continued to defend the firm’s Bitcoin-first approach. On August 25, he pointed to the company’s proprietary Bitcoin Yield metric, which he said reached 25.4% year-to-date, framing it as proof that Bitcoin accumulation continues to deliver long-term shareholder value.
