Law Firm Sues Strategy for Misrepresenting Bitcoin Strategy
Date: 2025-07-04 Author: Oliver Abernathy Categories: BUSINESS
Pomerantz LLP has filed a class action lawsuit in the U.S. District Court for the Eastern District of Virginia against Strategy (formerly known as MicroStrategy) and its management. The lawsuit alleges that the company misled investors by providing false information about the financial metrics associated with its Bitcoin strategy.
The lawsuit centers on new performance metrics such as BTC Yield, BTC Gain, and BTC $ Gain that Strategy used to demonstrate the success of its Bitcoin investments. The plaintiffs allege that the company concealed important risks related to the cryptocurrency’s high volatility and changes in accounting standards.
Effective January 1, 2025, Strategy transitioned to the new FASB ASU 2023-08 standard, which requires crypto assets to be measured at fair value. Previously, the company only accounted for impairment losses, without recording the increase in the value of Bitcoin until it was sold. In April 2025, Strategy announced an unrealized loss of $5.91 billion for the first quarter, which was confirmed in its financial report in May.
In addition, the lawsuit states that the company's representatives overstated the expected return on Bitcoin investments, underestimated the risks associated with exchange rate fluctuations, and made public statements that were false and misleading at all stages.
Recall that at the end of June 2025, Strategy acquired an additional 4,980 BTC worth about $532 million, which indicates the company's ongoing aggressive strategy in the crypto market.
The Pomerantz LLP lawsuit reflects growing investor concerns about the transparency and reliability of cryptocurrency-related reporting, especially in the face of the volatility and complexity of digital asset accounting. The case is pending in court, and its outcome could have a significant impact on the market and corporate disclosure practices for crypto assets.
