Class Action Lawsuit Filed Against Michael Saylor's Strategy Over Bitcoin Investment Claims

A class action lawsuit filed on May 16, 2025, in the U.S. District Court for the Eastern District of Virginia has targeted Michael Saylor’s Strategy, formerly MicroStrategy, and its top executives, alleging misleading statements about the company’s Bitcoin focused investment strategy. The legal action, led by plaintiff Anas Hamza, claims that Strategy and its leadership misrepresented the profitability and risks associated with its aggressive cryptocurrency investments, leading to significant financial losses for investors. As Bitcoin continues to dominate financial discussions, this lawsuit highlights the growing scrutiny surrounding corporate cryptocurrency strategies and their impact on shareholders.

The lawsuit arrives at a time when Strategy has solidified its position as the largest corporate holder of Bitcoin, with holdings exceeding 576,230 BTC, valued at over $59 billion as of May 18, 2025. The company’s bold pivot to cryptocurrency has drawn both admiration and skepticism, making this legal challenge a pivotal moment for Saylor and his vision of Bitcoin as a transformative financial asset.

The class action lawsuit accuses Strategy, along with executives Michael Saylor, Phong Le, and Andrew Kang, of violating Section 10(b) and Section 20(a) of the Securities Exchange Act of 1934. According to court documents, the plaintiff represents a group of investors who purchased Strategy securities between April 30, 2024, and April 4, 2025. The allegations center on claims that the company made false or misleading statements about the expected profitability of its Bitcoin centric treasury operations. Specifically, the lawsuit argues that Strategy failed to adequately disclose the risks tied to Bitcoin’s volatility and the potential losses following the adoption of new crypto accounting standards under Accounting Standards Update No. 2023-08.

Investors allege that Strategy’s public statements, often amplified by Saylor’s vocal advocacy for Bitcoin, exaggerated the cryptocurrency’s potential as a hedge against currency devaluation while downplaying its inherent risks. The lawsuit contends that these omissions led to misguided investment decisions, resulting in unspecified financial damages for the plaintiff class. The complaint also highlights Strategy’s failure to disclose conflicts of interest related to its crypto holdings, which may have influenced the company’s optimistic projections. The plaintiffs are seeking unspecified damages, interest, attorneys’ fees, and other relief, while Strategy has vowed to vigorously defend itself against the claims.

Corporate Bitcoin Strategy Under Fire

This legal action builds on broader criticisms of Strategy’s Bitcoin strategy, which has involved raising significant capital through stock offerings and debt to fund its Bitcoin purchases. For instance, a recent SEC filing revealed that Strategy acquired 7,390 BTC for $764.9 million between May 12 and May 18, 2025, financed through common stock and preferred stock issuances. While these moves have bolstered the company’s Bitcoin portfolio, they have also exposed it to heightened market scrutiny, particularly as Bitcoin’s price fluctuations continue to spark debate.

Saylor’s prominence as a Bitcoin advocate has further intensified the spotlight on this lawsuit. Since 2020, Strategy has converted substantial portions of its treasury reserves into Bitcoin, positioning it as a pioneer in corporate Bitcoin adoption. Saylor has frequently compared Bitcoin to “digital gold,” arguing it serves as a superior store of value compared to traditional currencies. However, the lawsuit suggests that this narrative may have overstated the stability and profitability of such investments, leaving investors vulnerable to market volatility.

The outcome of this case remains uncertain, as Strategy has stated it cannot predict the resolution or estimate potential losses. The lawsuit reflects broader tensions in the crypto market, where enthusiasm for digital assets often clashes with regulatory and financial challenges. As Strategy continues to double down on its Bitcoin strategy, the legal proceedings will likely influence perceptions of corporate cryptocurrency investments and Saylor’s role as a leading figure in the space.