tl;dr
Bitcoin-focused company Strategy faces at least five securities fraud lawsuits accusing it of misleading investors about Bitcoin profitability and risks during April 2024 to April 2025. Multiple law firms have filed similar suits to compete for lead counsel status, which offers lucrative fees and co...
Strategy, a Bitcoin-focused company formerly known as MicroStrategy, is currently facing at least five securities fraud lawsuits. These suits accuse the firm of misleading investors about the profitability and risks of its Bitcoin holdings during an 11-month period spanning from April 2024 to April 2025. Multiple law firms have filed nearly identical lawsuits in an effort to secure the position of lead counsel, which offers significant control over the litigation and the potential for substantial legal fees.
The lawsuits allege that Strategy made materially false and misleading public statements regarding its Bitcoin acquisition strategy, contributing to investor losses amid dramatic fluctuations in Bitcoin's value. Strategy’s Bitcoin holdings, which recently climbed above $63 billion, saw an approximate $6 billion unrealized loss reported in Q1 2025, triggering warnings about the company’s profitability. This financial hit followed a sharp decline in Bitcoin's price, from around $95,000 per coin during Q1 purchases to a low near $82,000 at the earnings report, though Bitcoin has since rebounded.
Law firms are competing to represent the class of investors, seeking large institutional investors as lead plaintiffs because courts generally favor those with the largest losses and the capacity for effective case oversight. The process includes a July 15 deadline for courts to consolidate the cases under a single lead plaintiff. Notably, it remains unclear whether Strategy’s largest shareholders, including co-founder Michael Saylor who holds nearly 20 million shares worth approximately $7.8 billion, have joined any of the suits.
Experts note that the surge in filing multiple identical lawsuits is a common strategy among law firms aiming to demonstrate their commitment and capability to manage complex securities litigation. These suits follow a pattern wherein firms seek to maximize their influence and financial return through leadership roles in class actions. Strategy has publicly acknowledged the lawsuits, affirming its intention to vigorously defend against the claims, while emphasizing the unpredictability of the litigation’s outcome.