- Strategy faces class action over alleged bitcoin risk disclosure failures
- Lawsuit claims Strategy hid risks from volatile crypto and accounting changes
- Despite legal threats, Strategy adds 7,390 BTC, boosting holdings to 576,230
Strategy, the company well-known for its big Bitcoin bets and formerly called MicroStrategy, is now facing a new class action lawsuit.
A purported class action lawsuit, recently filed in the U.S. District Court for the Eastern District of Virginia, accuses Strategy of misleading investors about its aggressive bitcoin investment strategy.
The legal action targets several top executives, including Executive Chairman Michael Saylor, CEO Phong Le, and CFO Andrew Kang. It claims that Strategy failed to provide full transparency on the risks and potential losses tied to its large-scale bitcoin holdings.
Lawsuit Accuses Strategy, Saylor of Misleading Investors on Bitcoin Risks
The plaintiff, Anas Hamza, alleges that Strategy provided false or misleading information about the profitability and risk of its bitcoin-centric treasury approach. Investors who bought shares between April 30, 2024, and April 4, 2025, may be covered under the proposed class.
Hamza contends that Strategy neglected to reveal key financial risks related to bitcoin volatility and changes in accounting standards. Specifically, the complaint refers to Accounting Standards Update No. 2023-08. This update affects how crypto assets are treated in financial reports and could have significantly influenced investors’ decisions if fully disclosed.
Related: Strategy (MSTR) Accounts for 77% of ~700K Bitcoin Held by Public Companies
The lawsuit alleges violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, along with Rule 10b-5. These are critical regulations designed to protect investors from fraudulent market practices. While the damages remain unspecified in the filing, the plaintiff seeks financial compensation, legal fees, and additional relief for any affected shareholders.
Strategy Buys 7,390 More BTC Despite Legal Challenge, Holdings Top 576K
Despite the legal scrutiny, Strategy has continued to expand its bitcoin holdings. Between May 12 and May 18, 2025, the company purchased an additional 7,390 BTC. The total investment amounted to $764.9 million, at an average price of $103,498 per coin.
Consequently, as of May 18, Strategy holds 576,230 BTC. The company has spent approximately $40.18 billion on these acquisitions, with an average price of $69,726 per bitcoin.
Strategy to Defend Lawsuit; Can’t Estimate Potential Loss, SEC Filing Shows
Strategy disclosed the lawsuit in a May 19 SEC filing. The company affirmed its intention to defend vigorously against the claims.
Related: Saylor’s Relentless Strategy: Buys $1.9B More Bitcoin, Now Holds 2.5% of All BTC
However, Strategy also admitted it could not estimate potential losses or the case’s outcome at this point.
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