MicroStrategy confronts multiple securities fraud lawsuits following disclosures of substantial unrealized losses from its aggressive Bitcoin investment strategy, underscoring legal and market risks for corporate cryptocurrency holdings.
At least seven law firms initiated legal actions against the enterprise software company after it reported a $5.9 billion unrealized loss on its Bitcoin portfolio during the first quarter of 2025. MicroStrategy holds over 601,550 BTC, representing one of the largest corporate cryptocurrency positions globally. The legal complaints allege deficiencies in disclosures surrounding the company’s Bitcoin investment strategy and associated risks.
The lawsuits coincided with MicroStrategy’s share price declining 8.7% on April 7, 2025, reflecting investor apprehension about the disclosed losses and crypto market volatility. Despite the litigation, MicroStrategy continues to expand its Bitcoin treasury, purchasing $472 million worth of BTC after reporting its quarterly results.
Legal analysts observe these lawsuits may challenge perceived disclosure shortcomings rather than proving intentional fraud, signaling heightened regulatory scrutiny over corporate digital asset investments. The cases could establish significant precedents for accounting transparency requirements regarding cryptocurrency holdings in traditional financial reporting.