Strategy Cleared as Bitcoin Treasury Lawsuit is Dropped
The Bitcoin Treasury firm Strategy has prevailed after lead plaintiffs voluntarily dropped a class action lawsuit in Virginia federal court. Filed in May, the suit alleged that Strategy and executives Michael Saylor, CEO Phong Le, and CFO Andrew Kang overstated the profitability of its BTC holdings, downplayed volatility risks, and failed to disclose the full impact of adopting FASB ASU 2023-08 accounting standards. The withdrawal is with prejudice, preventing refiling in any court. Strategy reported approximately $5.9 billion in unrealized losses on Bitcoin Treasury holdings during Q1 2025 amid an 11% BTC slump—the weakest first-quarter performance since 2015. The company now holds 632,457 BTC (around $68.7 billion). This outcome removes legal uncertainty for Strategy and reinforces confidence in corporate crypto treasury practices.
Bullish
Dropping the class action removes a significant legal overhang for Strategy and its Bitcoin Treasury holdings, improving market sentiment. Similar past cases, such as the dismissal of regulatory suits against major crypto firms, led to short-term price gains and restored investor confidence. In the short term, traders may view this as reduced risk, potentially driving BTC buying. Long term, it underscores the stability of corporate crypto treasury strategies and may encourage further institutional investment in digital assets.