Strategy Faces Five Lawsuits Over $6 Billion Bitcoin Losses

Bitcoin-focused investment firm Strategy, formerly known as MicroStrategy, is currently facing at least five separate class-action lawsuits. These legal actions allege that the company made misleading statements to investors about the risks and profitability of Bitcoin investments, resulting in $6 billion in unrealized losses. The initial lawsuit was filed by Pomerantz LLP on May 16, with four other law firms—Gross Law Firm, Bronstein Gewirtz & Grossman, Kessler Topaz Meltzer & Check, and Levi & Korsinsky—subsequently filing their own lawsuits with similar content.

Legal experts note that this competitive filing of lawsuits is not uncommon in class-action securities litigation. Law firms often vie for the lead counsel role, which can be highly lucrative, with fees potentially reaching tens of millions of dollars. The lead plaintiff controls the litigation and determines the class attorneys, making the role highly sought after. In strong cases, many firms and plaintiffs file lawsuits to increase their chances of being selected as the lead plaintiff.

The lawsuits allege that Strategy made "materially false and misleading" statements about the profitability and risks of Bitcoin investments between April 30, 2024, and April 4, 2025. Law firms are actively issuing public press releases to attract more investors to join the case, with a critical deadline set for July 15. On this date, the court will choose a lead plaintiff, and all other cases will be consolidated under that umbrella. The primary goal for law firms is to include the most harmed investor among their plaintiffs, as the Securities Private Litigation Reform Act of 1995 mandates that the lead plaintiff role be given to the investor who suffered the most harm and volunteered to take on that role. Institutional investors are generally preferred for this role because they are more likely to monitor the case and the lawyers carefully.

The lawsuits against Strategy highlight the complex legal landscape surrounding Bitcoin investments and the potential risks for investors. As the court approaches the July 15 deadline, the outcome of these lawsuits will be closely watched by the financial community. The resolution of these cases could have significant implications for the future of Bitcoin investments and the strategies employed by companies like Strategy.