NY Firm Sues Strategy (MSTR) Over Misleading Bitcoin Disclosures

The law firm is representing investors who purchased Strategy securities from April 30, 2024, to April 4, 2025. The complaint alleges the company made false and misleading statements about its Bitcoin investment performance and failed to disclose the full extent of potential losses from changes in fair-value accounting.

Strategy, led by CEO Michael Saylor, has repositioned itself since 2020 as a Bitcoin Treasury Company, using equity raises and cash flows to accumulate Bitcoin as a primary reserve asset. The company argues that Bitcoin offers superior long-term protection against inflation and the erosion of fiat currency value.

The company adopted ASU 2023-08 on January 1, 2025, requiring crypto assets to be marked to market. Pomerantz contends that Strategy touted new key performance indicators, including “BTC Yield,” “BTC Gain,” and “BTC $ Gain” while downplaying the risks posed by crypto volatility and the accounting switch. 

Before the new accounting standard, Strategy used a cost-less-impairment model that only recognized downward adjustments and omitted potential upward mark-ups. This model classified Bitcoin as an intangible asset, meaning price recoveries couldn’t be reflected unless the asset was sold. 

Strategy's stock dropped 8.67% to close at $268.14 per share following the company's April disclosure of a $5.91 billion unrealized fair-value loss on its Bitcoin assets. The complaint was filed under docket 25-cv-00861 in the U.S. District Court for the Eastern District of Virginia.

Pomerantz seeks remedies under Sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5, including damages and rescission of transactions for the class. The firm urges affected investors to contact them by July 15, 2025, to participate in lead plaintiff selection.