Catena, Monday, May 19, 2025--Bitcoin treasury firm Strategy and its co-founder Michael Saylor are facing a class action lawsuit alleging violations of federal securities laws related to misleading statements about the company’s profitability and risk exposure tied to its bitcoin strategy.
Filed last week in the US District Court for the Eastern District of Virginia by investor Anas Hamza and others, the complaint targets the company’s financial reporting between April 2024 and April 2025. CEO Phong Le and CFO Andrew Kang are also named as defendants.
The lawsuit accuses Strategy of overstating financial performance following the adoption of new accounting standards in 2025. Under the Financial Accounting Standards Board’s ASU 2023-08, crypto holdings must now be reported at fair value with gains and losses recognized each quarter. Previously, Strategy was only required to report impairments on declining assets unless sold.
Investors allege that Strategy misrepresented its earnings by highlighting gains and omitting the potential for significant unrealized losses, misleading shareholders on the true volatility of its $59 billion bitcoin position. The firm currently holds 576,230 BTC, acquired for $40.2 billion at an average of $69,726 per coin.
Strategy acknowledged the lawsuit in an SEC filing Monday and said it intends to “vigorously defend against these claims,” but declined further comment. The plaintiffs seek unspecified damages, legal fees and related costs.
