New York Law Firm Files Class Action Lawsuit Against Strategy, Alleging Misleading Bitcoin Investment Disclosure

On July 3rd, as per The Block, the New York-based law firm Pomerantz LLP recently initiated a class-action lawsuit against Michael Saylor-led Strategy company (formerly MicroStrategy). The lawsuit alleges that the company made false and misleading statements regarding the profitability of its Bitcoin investment strategy, thereby violating federal securities laws. This lawsuit was filed in the Eastern District of Virginia and pertains to Strategy investors from April 30, 2024, to April 4, 2025. Other investors have the opportunity to join the class-action lawsuit by July 15th. The key accusations in the lawsuit are that Strategy exaggerated the profitability of its Bitcoin investment strategy and fund management business, downplayed the volatility risk of Bitcoin, and failed to adequately disclose the impact of adopting the new accounting standard (ASU 2023-08) on its financial statements. Specifically, in the first quarter of 2025, due to the implementation of the new standard, Strategy reported a $5.9 billion unrealized loss on digital assets, resulting in a more than 8% drop in the stock price at that time. Pomerantz accuses the company of focusing only on Bitcoin gains while concealing potential significant losses under fair value measurement.