Michael Saylor’s Strategy—the company formerly known as MicroStrategy and a pioneer in corporate Bitcoin (BTC) accumulation—is facing a growing wave of securities fraud lawsuits, but legal experts say many of them may go nowhere.
As of mid-July 2025, at least seven U.S. law firms have filed class action complaints alleging that Strategy misled investors by overstating expected profits from its Bitcoin strategy and understating the risks and volatility.
But legal analysts say the cases may take years to resolve—or may not succeed at all.
What the Lawsuits Claim
The complaints largely center around Strategy’s $5.9 billion unrealized loss on its BTC holdings reported in Q1 2025, and how that impacted share prices and investor sentiment.
One lawsuit points to an 8.7% drop in Strategy’s share price on April 7, shortly after the company’s SEC 8-K filing acknowledged that:
“We may not be able to regain profitability in future periods, particularly if we incur significant unrealized losses related to our digital assets.”
Plaintiffs argue the company failed to sufficiently warn investors about the magnitude of such risks, especially after adopting the ASU 2023-08 accounting standards, which require digital assets to be reported at fair market value.
Legal Experts: “These Cases Often Don’t Go Anywhere”
Despite the serious allegations, some legal experts view these lawsuits as routine in the high-volatility world of crypto finance.
Tyler Yagman, a crypto attorney at The Ferraro Law Firm, told Cointelegraph:
“A lot of times these class actions are filed, they end up kind of spurring out and not going anywhere. It could be a multi-year process.”
Brandon Ferrick, general counsel at Web3 firm Duoro Labs, added:
“These are super common. Disclosures are hard to get right in emerging industries like crypto.”
He emphasized that plaintiffs aren’t accusing Strategy of hiding all risks—but rather of understating them, which may be harder to prove in court.
Firms Behind the Complaints
The law firms leading the charge include:
- Pomerantz LLP
- Robbins Geller Rudman & Dowd LLP
- Glancy Prongay & Murray LLP
- The Schall Law Firm
- Kessler Topaz Meltzer & Check LLP
- Bronstein, Gewirtz & Grossman LLC
Despite the lawsuits, Strategy continues to buy Bitcoin aggressively. On Monday, the company added another $472 million worth of BTC, according to its executive chairman Michael Saylor.
Strategy’s Transparency—and the Bigger Picture
With the launch of Bitcoin ETFs in 2024 and rising institutional participation, experts say crypto-treasury companies like Strategy now face greater scrutiny from investors and regulators.
Yagman explained:
“These companies are now being viewed like crypto ETFs in disguise. That means the management needs to be as transparent and direct as possible—because crypto markets are known to be volatile.”
Strategy’s Q2 2025 earnings are scheduled for July 31, with analysts expecting an EPS of -0.10. That follows a disappointing Q1 EPS of -16.53, driven largely by digital asset markdowns.
Conclusion: Risky Road Ahead, But Not Unusual
While the headlines sound dire, experts stress that securities class actions—especially in volatile sectors like crypto—are not uncommon and often don’t result in significant penalties. However, the real challenge for Strategy may lie in investor trust and ongoing transparency.
As crypto matures, corporate BTC strategies may come under greater legal and regulatory scrutiny, forcing firms to walk a tightrope between bold innovation and regulatory compliance.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.