Investors have dropped their class-action lawsuit against Strategy Inc., a major Bitcoin holder, and its executives. The suit alleged misleading statements about the company’s Bitcoin investment strategy and a recent accounting change.
The Accusations
The lawsuit, filed in a Virginia court, claimed Strategy Inc., its co-founder Michael Saylor, CEO Phong Le, and CFO Andrew Kang violated federal securities laws. Specifically, it argued the company downplayed the risks of its heavy Bitcoin investment and didn’t clearly explain how profitable it expected this investment to be. The suit also pointed to a new accounting rule (ASU No. 2023-08) that requires companies to report the fluctuating value of crypto assets directly in their earnings. The plaintiffs claimed the company didn’t adequately disclose the potential impact of this rule.
The Case is Dismissed
Surprisingly, the plaintiffs voluntarily dropped their case. This means they can’t refile the same claims, although other potential members of the class could still pursue action. The lawsuit covered a period from April 30, 2024, to April 4, 2025, and sought unspecified damages and legal fees. The dismissal avoids a lengthy and costly legal battle for Strategy Inc.
Strategy Inc.’s Response and Current Status
Strategy Inc. had previously stated it would fight the allegations and insisted its disclosures were accurate. The company recently raised $359 million through a stock sale, using the proceeds to buy more Bitcoin. Currently, Strategy Inc. holds approximately 632,457 Bitcoin, valued at roughly $68.5 billion. At the time of writing, the company’s stock (MSTR) is down slightly.