Strategy, formerly known as MicroStrategy and a top Bitcoin holder, is facing a lawsuit from investors. The lawsuit, which named Strategy executives Michael Saylor, Phong Le and Andrew Kang, as well as other individuals, alleges that the company misrepresented its Bitcoin investment approach.
This new development follows Strategy’s announcement of the purchase of Bitcoin (BTC) worth around $765 million. While nothing has been confirmed yet, the lawsuit could shake up Strategy’s Bitcoin-buying activities. The MSTR stock might also take a hit.
The Class-Action Lawsuit Against Strategy
As per reports, the class-action lawsuit against Strategy was filed in the U.S. District Court for the Eastern District of Virginia. The lawsuit stems from Anas Hamza (the plaintiff) representing Strategy investors between April 30, 2024 and April 4, 2025. In the lawsuit, Hamza named Michael Saylor, Phong Le and Andrew Kang as the defendants.
🚨BREAKING: @Strategy is facing a class action lawsuit, alleging misleading statements on its #Bitcoin strategy. https://t.co/pYqnc6HwoY pic.twitter.com/VbPOQ2PxIV
— CryptosRus (@CryptosR_Us) May 19, 2025
The plaintiff allege that Strategy issued misleading statements that swayed investors during the period. Additionally, the lawsuit claims that the company failed to disclose expected profitability of its Bitcoin-focused investments as well as its Bitcoin reserve activities. The plaintiff also purports that Strategy did not disclose risks associated with Bitcoin.
“The named defendants made false and/or misleading statements with respect to and/or failed to disclose information with respect to the anticipated profitability of our bitcoin-focused investment strategy and treasury operations, and the various risks associated with bitcoin’s volatility,” as per Strategy’s filing with the U.S SEC.
It is alleged that Strategy violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5. These laws prohibit fraudulent or misleading statements in the trading of securities.
As confirmed by Strategy, the plaintiff seeks unspecified damages to the particular class of investor as well as other forms of relief. “The complaint seeks unspecified damages to the class, interest, attorneys’ fees, costs, and other relief,” Strategy wrote. The firm also confirmed that it would defend against the claims.
Strategy Acquired 7,390 BTC Prior Legal Troubles
While legal matters unfold, Strategy expanded its Bitcoin holdings. On May 19, the firm revealed the purchase of 7,390 BTC. The firm paid around $764.9 million for the coins. The average price was just below $103,500 per Bitcoin.
This purchase was disclosed in a filing with the U.S. Securities and Exchange Commission. Strategy now holds 576,230 BTC as per the filing with the U.S SEC. The total cost of acquisition stands at $40.18 billion. The average price for the full stash is $69,726 per coin.
As at press time, data from CoinMarketCap shows that Bitcoin is trading at $104,536.02. This marks a 22.37% rise over the past month. With the recent rally, Strategy’s Bitcoin portfolio is now worth over $60.24 billion. This results in an unrealized gain of around $20.06 billion.
Potential Implications of the Lawsuit Against Strategy
With the lawsuit against Strategy claiming that the firm misled the public and shareholders about its Bitcoin activities and results, potential impact on the MSTR stock lie ahead. In fact, the MSTR shares dropped in the pre-market, despite earning a 25% gain over the last month. As at press time, data by TradingView shows that the stock is trading at $406.30, marking a +1.63% on the day.
However, the stock’s performance is ahead of Bitcoin which has gained just 8% in 2025. Some traders believe that reports of the class action lawsuit may be partly responsible for the drop in the company’s stock. Additionally, Bitcoin dipped to the $102,000 level earlier, potentially as a result of the lawsuit. Market participants will keep an eye on any developments regarding the lawsuit as it could affect BTC and the MSTR stock prices.
