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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, accusing the company of securities fraud. The filings claim that Strategy misled investors about its Bitcoin investment strategy by overstating potential profits and downplaying risks.
According to recent reports, Strategy’s disclosure of a $5.9 billion unrealized loss on its digital assets has sparked numerous legal actions. This revelation was made in an 8-K SEC filing on April 7, which led to a sharp decline in the company’s share price by 8.7% that same day.
The lawsuits refer to Strategy’s disclosure of its Bitcoin investment strategy and the risks involved. They argue that the company failed to adequately disclose these risks to investors, resulting in significant financial losses.
In an interview, crypto lawyer Tyler Yagman from The Ferraro Law Firm emphasized that many class-action lawsuits like this may not reach a trial or result in substantial settlements. According to him, it is common for these cases to fizzle out without resolution.
“Many of these class actions are filed and then they just kind of dissipate,” Yagman said.
Source: coinchapter.com
