Strategy Faces Allegations of Concealing Bitcoin Risks

On May 19, the company Strategy was hit with a class-action lawsuit. The firm’s leadership is accused of making “false or misleading statements” about the profitability of its bitcoin strategy and concealing the asset’s volatility risks.

The allegations involve Chairman Michael Saylor, CEO Phong Le, and CFO Andrew Kang. The plaintiffs cite violations of securities law.

The plaintiffs’ representative, Anas Hamza, stated that the claims are made on behalf of a group of investors for the period from April 30, 2024, to April 4, 2025. Strategy emphasized that it “intends to defend itself vigorously.”

At the time of writing, Strategy holds 576,230 BTC, purchased for $40.2 billion (average price — $69,726). With the current bitcoin price at $102,615, the company’s unrealized profit exceeds $19.2 billion.

The founder of DeFi Llama, known as 0xngmi, criticized the lawsuit, noting that Strategy “has openly positioned itself as a leverage play on bitcoin.”

the lawsuit seems to be people complaining that microstrategy understated how much money it could lose if BTC went down

but if you’re buying a company that is self-labelled as “leverage on bitcoin”, what do you expect? it’s pretty clear what will happen if btc goes down https://t.co/w0Dis8ZUM9 pic.twitter.com/I6Uw6zMcqJ

— 0xngmi (@0xngmi) May 19, 2025

In his view, the claims of underestimating risks are unfounded:

“What else do you expect when buying shares of such a company?”

A day before the lawsuit was filed, Strategy purchased 7,390 BTC for $764.9 million. The average purchase price was $103,500 per coin.

Never short a man who buys orange ink by the barrel. pic.twitter.com/4h2sEbIraT

— Michael Saylor (@saylor) May 18, 2025

In the first quarter, Strategy earned $5.8 billion from bitcoin, while the company’s losses exceeded $4 billion.