MicroStrategy Is Sued for Allegedly Lying About Its Bitcoin Investing Plan

On May 19, 2025, a class-action lawsuit was launched against Strategy, which used to be called MicroStrategy, and its leaders

A class-action lawsuit was filed on May 19, 2025, against Strategy, formerly known as MicroStrategy, and its executives, including Executive Chairman Michael Saylor, for allegedly breaching federal securities laws by making false statements about its Bitcoin investment strategy.

The lawsuit, filed by Anas Hamza, claims that Strategy misled investors by exaggerating the profitability of its Bitcoin-focused strategy and failing to disclose the associated risks. This, in turn, led to a substantial unrealized loss of $5.9 billion by Q1 2025, which was reported by the company.

According to the complaint, the company’s stock price dropped by 8.67% on April 7, 2025, after the company disclosed a 16.3% return on its Bitcoin holdings for the year.

Saylor steered Strategy to begin buying Bitcoin in 2020. The company currently holds over 576,000 BTC, valued at $60.6 billion at current prices. Strategy adopts an approach where it borrows and sells stock to fund more Bitcoin purchases, employing an aggressive strategy.

The lawsuit names Saylor, Director Le, and CFO Andrew as defendants. It alleges that their statements induced shareholders into believing that the Bitcoin treasury strategy was sustainable and highly profitable. Hamza is representing stockholders who allegedly suffered losses due to these false statements.

The filing mentions Strategy’s recent purchase of 7,390 BTC for $764.9 million, which was reported on May 19, 2025, at an average price of $103,498. The complaint highlights that the company downplayed the risks and volatility of its assets.

Saylor has been a vocal supporter of Bitcoin, predicting that it could reach $13 million by 2045. He has touted Bitcoin as a superior wealth preservation asset, leading Strategy to pivot towards a Bitcoin treasury firm. Since adopting this strategy in 2020, the company’s stock price has surged more than 3,000%.

However, critics argue that Strategy’s significant exposure to Bitcoin makes it highly risky for stockholders. The complaint claims that the undisclosed risks caused the firm to sustain substantial losses when Bitcoin’s price declined, impacting the company’s financial stability.

The action, filed in the U.S. District Court for the Eastern District of Virginia, could set a precedent for firms engaging in Bitcoin treasury strategies. Its outcome might influence the implementation of stricter regulations on corporations heavily involved in cryptocurrencies.