Pomerantz Files Lawsuit Against Strategy for Misleading Bitcoin Profit Claims

Highlights:

• Pomerantz sues Strategy for misleading investors on Bitcoin profits and downplaying volatility risks.
• Lawsuit cites $5.9B unrealized loss, 8% stock drop after adopting new accounting rules.
• Strategy holds 597,325 BTC, bought using debt and equity, as its primary reserve asset.

New York-based law firm Pomerantz LLP has filed a class action in the U.S. District Court for the Eastern District of Virginia against Michael Saylor’s company, Strategy (formerly MicroStrategy). The lawsuit claims the firm broke federal securities laws by making false and misleading statements about the profitability of its Bitcoin (BTC) investment strategy.

The lawsuit covers investors who bought Strategy shares between April 30, 2024, and April 4, 2025. Pomerantz noted that additional investors have until July 15 to join the class action. The lawsuit claims Strategy exaggerated the profitability of its Bitcoin investment and treasury operations, while minimizing the risks tied to Bitcoin’s volatility. As a result, the company’s public statements were “materially false and misleading,” according to the filing.

Lawsuit Targets Strategy’s Use of New Accounting Rule

The lawsuit covers investors who bought Strategy shares between April 30, 2024, and April 4, 2025. Pomerantz noted that additional investors have until July 15 to join the class action. The lawsuit claims Strategy exaggerated the profitability of its Bitcoin investment and treasury operations, while minimizing the risks tied to Bitcoin’s volatility. This replaced the older method, where only losses were recorded when prices dropped, and gains were only reported after the assets were sold.

Pomerantz said Strategy and CEO Michael Saylor highlighted gains but ignored major risk factors. The lawsuit claims they left out key details investors needed to understand the full risk.

The effect became clear on April 7 when Strategy filed a report with the SEC. It showed a $5.91 billion unrealized loss from Bitcoin due to price drop and new accounting rules. This caused Strategy’s stock to fall by 8%. A few weeks later, Strategy confirmed the loss in its Q1 earnings report. The company marked down its Bitcoin holdings due to market volatility under the new accounting method. The lawsuit aims to hold Strategy responsible and seek compensation for investors who bought its stock during that time.

The firm stated:

“They did this, in part, by reporting and projecting positive BTC Yield, BTC Gain, and BTC $ Gain results, while omitting the immense losses the Company could realize on its bitcoin assets after accounting for these assets under a fair value accounting methodology.”

Strategy Still Leads in Bitcoin Holdings

Strategy remains the largest corporate holder of Bitcoin. It holds about 600,000 BTC on its balance sheet, currently worth around $65 billion. The company started accumulating Bitcoin back in 2020 and has since seen its stock price soar by more than 3,300% over the past five years. It has been steadily acquiring cryptocurrency using funds raised through debt, equity offerings, and operating income.

Strategy has acquired 4,980 BTC for ~$531.9 million at ~$106,801 per bitcoin and has achieved BTC Yield of 19.7% YTD 2025. As of 6/29/2025, we hodl 597,325 $BTC acquired for ~$42.40 billion at ~$70,982 per bitcoin. $MSTR $STRK $STRF $STRDhttps://t.co/ZDUsjf8zV5

— Strategy (@Strategy) June 30, 2025