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Strategy Accused of Hiding Truth About Bitcoin Losses in Lawsuit
A group of investors has accused Strategy, a publicly traded company, of deliberately concealing the truth about its Bitcoin losses in an ongoing lawsuit. The suit, led by New York law firm Pomerantz LLP, claims that Strategy and several top executives, including Michael Saylor, CEO Phong Le, and CFO Andrew Kang, have made “materially false and misleading” statements about the performance of its Bitcoin holdings.
According to the complaint, Strategy adopted a new accounting standard in 2023, which required the company to record unrealized losses on its Bitcoin assets at fair value. However, instead of providing accurate information to investors, plaintiffs argue that Strategy deliberately hid $5.9 billion in unrealized Bitcoin losses from April 2024 to April 2025.
The lawsuit claims that this lack of transparency led to a significant stock drop of over 8% when the losses were eventually revealed in an SEC filing on April 7. The sudden downturn in the share price allegedly resulted from investors’ unwarranted trust in Strategy’s earlier optimistic projections, which failed to account for the true magnitude of its Bitcoin holdings.
The plaintiffs demand that Strategy be ordered to correct any material misrepresentations and pay any losses incurred by shareholders as a result of this alleged deception. Furthermore, the lawsuit seeks unspecified monetary damages.
Strategy has responded by vowing to “vigorously defend” the suit, insisting that it adhered to accounting rules and disclosed all essential information.
In response to this situation, investors have been given until July 15 to submit their nominations as lead plaintiffs in the case. The outcome of this lawsuit could set a crucial precedent for publicly traded companies handling crypto assets, requiring greater transparency regarding these investments.
A significant development if successful, this legal action could shape the future of cryptocurrency asset disclosure and potentially reshape investor trust.
Source: crypto-economy.com
