Strategy Investor Lawsuit Over Bitcoin Losses Dismissed
Lawsuit Against Strategy Over Bitcoin Investments Dropped
A lawsuit against Michael Saylor’s Strategy, initiated by investors claiming the company made misleading statements about its Bitcoin strategy and accounting practices, has been voluntarily dismissed. The legal filing was submitted to a federal court in Virginia.
Court records indicate that the lead plaintiffs, represented by Cohen Milstein Sellers & Toll and Pomerantz LLP, voluntarily withdrew their case. Bloomberg Law first reported the dismissal, which is with prejudice, preventing it from being refiled in its current form.
Key Allegations and Background
Strategy investors filed the lawsuit in May against the company and its executives, including Michael Saylor (CEO), Phong Le (President), and Andrew Kang (CFO). The core allegation was that Strategy failed to properly disclose the impact of new accounting standards—specifically, the Financial Accounting Standards Board’s ASU 2023-08—which would lead to a substantial unrealized loss.
Financial Performance and Bitcoin Holdings
- In Q1 2025, Strategy reported nearly $6 billion in unrealized losses related to its Bitcoin and other crypto holdings due to a market downturn. Bitcoin itself experienced an almost 12% decline during this period.
- However, in Q2 2025, Strategy rebounded, achieving a record net income of $10 billion and an operating income of $14 billion, driven by gains from its Bitcoin investments.
- As of now, Strategy holds 632,457 BTC, valued at approximately $68 billion.
- The company’s shares have increased by around 153% over the past year, according to Yahoo Finance data.
The dismissal marks the end of this particular legal challenge against Strategy's Bitcoin investment strategy. For projects considering similar investment strategies, robust risk assessment and transparent communication with investors are vital.