Lawsuit Targets Michael Saylor’s Strategy as Firm’s Bitcoin Stash Exceeds $65 Billion

Michael Saylor’s Strategy (formerly MicroStrategy) has become synonymous with corporate Bitcoin accumulation. Boasting over 597,325 BTC, the firm is the largest crypto holder among public companies. However, this bold Strategy has also drawn legal scrutiny. 

A class-action lawsuit filed in Virginia’s Eastern District accuses Saylor and his executive team of misleading investors about Bitcoin’s risks, valuation, and the financial impact of shifting to fair-value accounting.

Details of the Lawsuit

On May 16, 2025, investor Anas Hamza, represented by New York’s Pomerantz LLP, filed a class action suit against Strategy and its top executives, including Michael Saylor, Phong Le, and CFO Andrew Kang. 

The complaint claims that Strategy did not reveal the specific nature or extent of the anticipated effect of the volatility of Bitcoin. Strategy had switched to fair-value accounting per FASB’s standards (ASU 2023-08) in January 2025. 

Therefore, Strategy had to disclose an unrealized loss of $5.9 billion in Q1 2025. Following this disclosure, the stock price dropped 8% on April 7, 2025, though it has seen significant growth overall, up 3000% in five years and 204% in 2024.

Investors claim the firm “exaggerated Bitcoin returns while downplaying market risks and conflicts of interest,” potentially breaching Sections 10(b) and 20(a) of the Securities Exchange Act. 

The complaint is requesting unspecified damages, legal fees, and other relief on behalf of investors who owned shares between April 30, 2024 and April 4, 2025. Currently, the BTC price has dropped to 0.6% on the 24H timeframe. However, the flagship coin is bullish on the 7D chart with a 1.8% gain.

Michael Saylor Remains Unperturbed 

Despite the legal storm, Saylor hinted at more Bitcoin buys, tweeting, “Nothing stops this orange,” on June 22. Recently, Strategy bought 4,980 BTC, bringing its total holdings to 597,325 BTC. Looking ahead, Saylor maintains a long-term $13M/BTC price target, framing volatility as a non-issue.

However, the Bitcoin supporters’ Bitcoin accumulation spree has come under criticism. Critics like short-seller Jim Chanos lambast Strategy’s model as “financial gibberish,” noting its $100B market cap dwarfs its $65B BTC stash. Others warn that such strategies could deter institutional adoption if losses mount without clear risk disclosures.  

Interestingly, this lawsuit isn’t Strategy’s first legal trouble. In mid-May, Strategy faced another legal challenge. This proposed class-action lawsuit was also tied to its adoption of the FASB crypto accounting rule, which purportedly played a role in its first-quarter losses. 

The complaint, brought by Anas Hamza, accused the company of inadequately disclosing the extent of the rule’s expected impact while minimizing the associated risks when implementing the new accounting standard.

What This Means for Corporate Crypto Adoption

Strategy’s aggressive Bitcoin strategy, led by Michael Saylor’s unwavering conviction, has undeniably reshaped corporate crypto investment. 

Nevertheless, the recent case against Strategy is an indicator of the dangers that firms can encounter by pursuing aggressive crypto policies without complete disclosure. The case may influence the attitude of public companies towards crypto, demanding more transparent disclosures, improved risk management, and compliance.