According to BlockBeats, Strategy is currently dealing with at least five lawsuits accusing the company of securities fraud related to its Bitcoin treasury management. Legal experts informed Decrypt that the number of such lawsuits is not unusual, as law firms often compete for control over consolidated class-action lawsuits to maximize their potential earnings. In these cases, law firms typically file separate lawsuits until a judge appoints a lead plaintiff and consolidates the cases.
The allegations against Strategy involve claims that the company issued "substantially false and misleading" public statements, which misled investors about the expected profitability and risk assessment of its Bitcoin purchases. The lawsuits stem from Strategy's first-quarter acquisition of Bitcoin worth $7.7 billion, which resulted in an unrealized loss of $6 billion due to a decline in Bitcoin prices.
