news 
Lawsuits Pile Up Against Strategy Over Bitcoin Losses, Legal Process Could Take Years
At least seven law firms have filed lawsuits against Strategy, formerly known as MicroStrategy, claiming the company is guilty of securities fraud. The accusations stem from allegedly misleading investors about its Bitcoin investment strategy by overstating potential profits and downplaying risks.
The lawsuits are in response to Strategy’s recent disclosure of a $5.9 billion unrealized loss on its digital assets. This information was reported in the company’s 8-K SEC filing on April 7, which resulted in an immediate 8.7% drop in share price.
Several law firms have joined forces to bring these class-action lawsuits against Strategy. The firms involved include Pomerantz LLP, Robbins Geller Rudman & Dowd LLP, Glancy Prongay & Murray LLP, The Schall Law Firm, Kessler Topaz Meltzer & Check LLP, and Bronstein, Gewirtz and Grossman LLC.
Experts believe that the legal process could take years to resolve. Tyler Yagman, a crypto lawyer from The Ferraro Law Firm, emphasized that many class-action lawsuits do not reach trial or result in large settlements. “What we see is that these class actions are filed, they end up kind of spurrying out and not going anywhere,” Yagman noted during an interview.
Brandon Ferrick, general counsel at Duoro Labs, added that such lawsuits are commonplace in the crypto industry. He pointed out that the complaints center on how Strategy presented its Bitcoin strategy to investors, rather than claiming that risks were entirely omitted. “Plaintiffs are alleging that profitability was overstated and that risks were understated — not that these things were entirely absent from disclosures,” Ferrick explained.
Despite ongoing legal battles, Strategy has continued to purchase more Bitcoin, most recently adding $472 million worth of the cryptocurrency on July 15. The company’s executive chairman, Michael Saylor, publicly announced this move via his X account. Strategy still holds over 601,550 BTC and shows no signs of slowing down its Bitcoin acquisition strategy.
The lawsuits have not deterred Strategy from its mission to continue using BTC as a key reserve asset, a policy the company has maintained since 2020.
Source: coinchapter.com
