Strategy faces class action tied to crypto accounting
Strategy faces class action over bitcoin disclosures
Strategy, the Bitcoin-focused enterprise led by Michael Saylor, is facing a class action lawsuit filed by New York-based law firm Pomerantz LLP, alleging that the company violated federal securities laws.
The complaint, lodged in the U.S. District Court for the Eastern District of Virginia, claims Strategy misled investors between April 30, 2024, and April 4, 2025, by overstating the profitability of its Bitcoin treasury strategy while failing to adequately disclose associated risks.
Misleading yield metrics and accounting gaps alleged
The lawsuit centers on the firm’s adoption of Accounting Standards Update (ASU) 2023-08, issued by the Financial Accounting Standards Board (FASB), which mandates fair value accounting for crypto assets. Under this standard, crypto holdings must be marked up or down in line with market prices, replacing the previous cost-less-impairment model that only recognized losses.
According to Pomerantz, Strategy failed to properly communicate the implications of the new accounting standards and downplayed the volatility and potential losses that could result from holding Bitcoin at fair market value. Strategy did not disclose a $5.9 billion loss in the first quarter of 2025Instead, the company allegedly projected “rosy” financial metrics such as BTC Yield, BTC Gain, and BTC $ Gain, which painted a distorted picture of financial performance.
The law firm further argues that Strategy’s public disclosures were materially false and misleading, creating a gap between investor expectations and the company’s actual financial risk exposure.
Investors who purchased or held Strategy securities during the complaint period may join the class action by July 15, 2025, according to the filing.
Broader implications for crypto-treasury firms
The case raises important questions about disclosure standards in crypto treasury management as regulators and auditors increasingly focus on fair value reporting.
As one of the most prominent corporate adopters of Bitcoin, Strategy’s legal challenges may set a precedent for how digital assets are accounted for and communicated to public investors moving forward.
We previously wrote that Strategy CEO sells company shares.
