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Michael Saylor’s Strategy Sued Over False Bitcoin Investment Claims
Strategy, the world’s largest corporate holder of bitcoin, led by CEO Michael Saylor, is facing a class-action lawsuit alleging false and misleading information about the risks involved in its Bitcoin investments. The lawsuit claims that Strategy deliberately hid important facts from investors and only highlighted the profits, downplaying the significant risks associated with investing in Bitcoin.
According to the lawsuit filed by Pomerantz LLP, a top New York-based law firm, Strategy created a false impression of highly profitable Bitcoin investments while concealing key risks like price volatility and changes in accounting rules. The law firm alleges that both Strategy and Michael Saylor focused on presenting positive results, such as BTC Yield and BTC Gain, without discussing the potential dangers, including the possibility of significant losses.
The lawsuit states that Strategy failed to disclose crucial details necessary for investors to fully understand the risks involved, leaving them with a misleading impression. This alleged deception led many investors to invest in Bitcoin without being properly informed about the potential consequences.
The case highlights a pivotal moment in which Strategy changed its accounting rules under ASU 2023-08. This new standard requires companies to display the real-time value of their Bitcoin holdings, rather than only showing losses when the price falls and gains when coins are sold. Prior to this change, Strategy had been following an outdated method that masked a significant unrealized loss of $5.9 billion in early 2025.
This revelation caused a significant stock plunge, with shares falling over 8% in a short span, shocking many investors. This controversy puts Strategy under intense pressure and raises questions about the authenticity of its Bitcoin strategy.
Source: coinpedia.org
