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Bitcoin Bet Turns Bitter: 5 Lawsuits Vs. Strategy For $6 Billion Losses
Strategy Inc., formerly known as MicroStrategy, has become the center of a legal storm after at least five class-action lawsuits were filed against them, claiming that the company hid significant risks related to their Bitcoin holdings and presented an overly optimistic outlook.
The lawsuits focus on approximately $6 billion in unrealized losses over an 11-month period between April 2024 and April 2025. The complaints argue that top executives breached their duties by misrepresenting information about Bitcoin’s fluctuations and a change in accounting practices that forces the company to value its cryptocurrency holdings at market rates.
In response to the allegations, the lawsuits highlight trades made by new CEO Phong Le and CFO Andrew Kang as evidence of insider trading. The executives allegedly sold around $32 million in stock just before publicly disclosing the shift in accounting procedures. This timing has sparked concerns about whether they possessed crucial information before informing investors.
The situation took a turn for the worse after Strategy announced that it would not break even during Q1 due to these same unrealized Bitcoin losses. This announcement triggered the initial lawsuit, filed on May 16 by Pomerantz LLP, and encouraged subsequent filings from Gross Law Firm, Bronstein Gewirtz & Grossman, Kessler Topaz Meltzer & Check, and Levi & Korsinsky.
Despite the legal turmoil, Strategy’s stock has shown a remarkable resilience, rising nearly 30% so far this year. The company holds an impressive 592,345 Bitcoins, valued at over $63 billion based on the current market rate of around $106,824 per coin.
Source: bitcoinist.com
