MicroStrategy Faces Class-Action Lawsuit Over $5.9B Bitcoin Accounting Shift

MicroStrategy's aggressive Bitcoin investment strategy, while widely lauded in the crypto industry, has now sparked significant legal challenges. A class-action lawsuit filed in the U.S. District Court for the Eastern District of Virginia targets the company and its executives, including founder Michael Saylor, alleging shareholder deception regarding Bitcoin-related risks.

The lawsuit follows the company's adoption of new accounting standards (ASU 2023-08) effective January 1, 2025, which require fair value reporting of cryptocurrency assets. This change forced MicroStrategy to disclose a staggering $5.91 billion unrealized loss in its Q1 2025 SEC filing - a revelation that triggered an 8% stock price drop.

Plaintiffs claim that while transitioning to its "Bitcoin Treasury Company" model, MicroStrategy continued promoting bullish metrics like BTC Yield and BTC Gain without adequately disclosing the potential downside risks under the new accounting framework. The complaint alleges violations of U.S. securities laws through misleading statements about the true financial impact of its Bitcoin strategy.

Despite these challenges, MicroStrategy maintains its position as the world's largest corporate Bitcoin holder, with nearly 600,000 BTC (worth approximately $65 billion) on its balance sheet at current market prices.