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

According to a report by Jinse Finance, The Block has reported that New York-based law firm Pomerantz has recently filed a class action lawsuit against Strategy, the company formerly known as MicroStrategy and led by Michael Saylor. The lawsuit alleges that the company made false and misleading statements regarding the profitability of its Bitcoin investment strategy, in violation of federal securities laws. Filed in the Eastern District Court of Virginia, the suit represents Strategy investors from April 30, 2024, to April 4, 2025. Other investors may join the class action before July 15. Key allegations include that Strategy exaggerated the profitability of its Bitcoin investment strategy and fund management business, downplayed the risks associated with Bitcoin’s volatility, 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 $5.9 billion in unrealized losses on digital assets, which led to a drop in its share price of over 8% at the time. Pomerantz accuses the company of highlighting Bitcoin gains while concealing the potential for significant losses under fair value measurement.