Investors Drop Class Action Against Bitcoin Company
On Thursday, a group of investors decided to terminate their class action lawsuit against Strategy, a Bitcoin treasury company. They had accused the firm of making false claims regarding its investment strategy. Moreover, they alleged that Strategy did not sufficiently disclose the effects of new accounting standards. Co-founder Michael Saylor, CEO Phong Le, and CFO Andrew Kang were all named as defendants in the case. Bloomberg reported the dismissal news on Friday. The lawsuit was originally filed by New York-based law firm Pomerantz LLP in May, in the Eastern District Court of Virginia, inviting other investors to join. The lawsuit contended that Strategy exaggerated the profitability of its Bitcoin investment strategy and treasury operations while minimizing the volatility risks linked to Bitcoin. It also criticized Strategy’s adoption of Financial Accounting Standards Board guidelines for fair value accounting for crypto assets, claiming that the nature and extent of the impact on financial statements were not adequately disclosed, which posed risks to investors. Currently, Strategy holds approximately $68.5 billion in Bitcoin, with its share prices having surged over 150% in the past year, according to The Block MSTR price page.
FAQ
❓ What was the basis of the class action lawsuit?
Investors accused Strategy of false statements and not disclosing the risks of its investment strategy.
❓ Who were the defendants in the lawsuit?
Michael Saylor, Phong Le, and Andrew Kang were named as defendants.