Strategy Inc., the world’s largest corporate holder of bitcoin, has dodged a major lawsuit after investors voluntarily dropped a class action lawsuit against the company.
The Strategy lawsuit, filed earlier this year, accused the company of misleading shareholders about how new accounting rules would impact its bitcoin-heavy balance sheet.
The lawsuit was brought by a group of investors, including lead plaintiffs Michelle Clarity, Mehmet Cihan Unlusoy, and an initiating plaintiff named Anas Hamza.
Their claim centered on Strategy’s switch to a new accounting model introduced by the Financial Accounting Standards Board (FASB).
Known as ASU 2023-08, the rules allow companies to record both gains and losses on digital assets at fair market value—unlike the old system which only permitted firms to write down losses without recognizing gains unless assets were sold.
Investors argued that Strategy, which holds more than 632,000 bitcoin worth over $68 billion, exaggerated how much the new accounting rules would boost its profitability. Despite bitcoin’s massive run in late 2024 and early 2025, Strategy still reported a $4.22 billion loss in Q1 2025.
The plaintiffs claimed in the Strategy lawsuit that the firm exaggerated the benefits of valuing bitcoin at its current market price instead of at its original purchase cost.
They claimed this lack of transparency misled the market and downplayed the risks associated with Strategy’s massive bitcoin bet.
The case got attention fast, with at least 8 law firms trying to sign up investors for related lawsuits. Some suits also named Strategy executives, including co-founder Michael Saylor, CEO Phong Le, and CFO Andrew Kang as defendants.
Despite the heated allegations, investors suddenly dropped their case. In late August, the plaintiffs filed a stipulation of dismissal “with prejudice” in the U.S. District Court for the Eastern District of Virginia, where Strategy is headquartered.
A dismissal with prejudice is big, meaning the plaintiffs can’t refile the same claims.
“Plaintiff does not get a second bite at the apple—they cannot amend the complaint and refile the suit,” explained Brandon Ferrick, general counsel for Duoro Labs. “The case is over and cannot be re-filed in the same court, or any court, on the same claim.”
While this dismissal saves Strategy from a long trial, the court only dismissed the specific claims of the lead plaintiffs. Other shareholders not part of the case can still bring their own lawsuits in the future.
The voluntary dismissal is a win for Strategy, which has built its entire corporate identity around Bitcoin. Since rebranding from MicroStrategy, the company has positioned itself as a bitcoin treasury leader—often compared to an ETF with a corporate structure.
The decision removes an immediate legal overhang that was worrying some investors. Analysts said it’s a big relief for Strategy, helping it focus on its core business and long-term bitcoin strategy.
But experts cautioned it’s far from over, and investor sensitivity to Strategy’s disclosures remains high. Earlier this year, the company’s stock price—MSTR—fell sharply when Michael Saylor changed the firm’s Minimum Net Asset Value (MNAV) policy.
A Wall Street advisor also called Strategy’s attempt to compare its price-to-earnings ratio to Apple and Nvidia “100% fraudulent” because the company’s performance was almost entirely dependent on bitcoin’s price, not recurring business fundamentals.
Even though the lawsuit is over, regulators, analysts, and investors will be watching Strategy’s financials closely.
Accounting standards for digital assets are still evolving, and companies with large bitcoin holdings are struggling to balance transparency with volatility.
