Lawsuits pressure Strategy over Bitcoin losses
Strategy faces two lawsuits claiming executives misled investors and profited from undisclosed accounting changes.
Michael Saylor’s Strategy, the largest corporate Bitcoin holder, is under pressure after reporting a $5.9 billion unrealised Q1 loss. The loss came after a new FASB rule requiring crypto assets to be valued at market price.
Investors allege the company failed to disclose the impact of the change, resulting in a sharp drop in share price.
The lawsuit, led by investor Abhey Parmar, claims executives breached fiduciary duties by downplaying Bitcoin volatility and misrepresenting the effects of the accounting shift.
CEO Phong Le and CFO Andrew Kang are accused of selling nearly $31.5 million in shares before the changes were made public. The move has raised concerns about insider trading and corporate governance.
A second class-action lawsuit has been filed, intensifying scrutiny of Strategy’s reporting practices. Despite the legal challenges, the company’s stock has gained around 28% year-to-date, reflecting persistent investor interest in its Bitcoin strategy.
Saylor’s cryptic social media activity has sparked speculation about more Bitcoin purchases. With over 592,000 BTC held—worth nearly $60 billion—Strategy’s continued accumulation signals a strong commitment to its crypto-first approach, even as legal risks grow.
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