The law firm Pomerantz LLP has initiated a class action lawsuit against Strategy (formerly known as MicroStrategy) and its executives. The lawsuit has been filed in the U.S. District Court for the Eastern District of Virginia.
This is reported by Finway
Allegations of false financial statements
The plaintiffs claim that Strategy provided misleading information about its financial performance by using new key performance indicators — BTC Yield, BTC Gain, and BTC $ Gain. According to the lawsuit, these indicators were used to create an impression of high effectiveness in the company’s Bitcoin investments, while the actual risks associated with cryptocurrency volatility and changes in accounting standards remained concealed.
“The lawsuit concerns the company’s false statements regarding financial performance, particularly the new KPIs — BTC Yield, BTC Gain, and BTC $ Gain — which were used to demonstrate the effectiveness of Bitcoin investments. Strategy allegedly concealed the risks associated with the volatility of the first cryptocurrency and changes in accounting standards.”
Transition to new standards and financial results
As of January 1, 2025, Strategy transitioned to the FASB ASU 2023-08 standard, under which crypto assets must be measured at fair value. Prior to this, the company only accounted for impairment losses, not recognizing the increase in Bitcoin’s price until the asset was realized. On April 7, 2025, Strategy announced unrealized losses of $5.91 billion for the first quarter of 2025, and on May 1, this data was confirmed in the financial report.
The complaint states that the company’s management:
- overstated the expected profitability of the Bitcoin strategy;
- understated the risks associated with Bitcoin volatility and potential losses from the new accounting approach;
- made public statements that turned out to be false and misleading at all stages of operations.
It is worth noting that between June 23 and June 29, 2025, Strategy acquired an additional 4,980 Bitcoins for a total of $532 million.