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

BlockBeats News, July 3rd, according to The Block, the New York-based law firm Pomerantz LLP recently filed a class-action lawsuit against Michael Saylor-led Strategy company (formerly MicroStrategy), alleging that the company made false and misleading statements about the profitability of its Bitcoin investment strategy, in violation of federal securities laws. This lawsuit, filed in the Eastern District of Virginia, represents Strategy investors from April 30, 2024, to April 4, 2025. Other investors can join the class-action lawsuit by July 15th.

The key allegations of the lawsuit include that Strategy overstated 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 adoption of the new standard, Strategy reported a $5.9 billion unrealized loss on digital assets, causing the stock price to drop over 8% at that time. Pomerantz accuses the company of emphasizing only Bitcoin gains while concealing potential significant losses under fair value measurement.