Michael Saylor’s Bitcoin Strategy in Legal Trouble: Class Action Over $5.9 Billion Loss
MicroStrategy – the company famous for Michael Saylor’s “all-in Bitcoin” strategy – is facing a major legal challenge after a class action lawsuit was filed in the U.S. District Court for the Eastern District of Virginia. The lawsuit alleges that the company and its top executives, including founder Michael Saylor, misled investors about the financial risks associated with its large-scale Bitcoin holding strategy.
From Bitcoin Treasury to Billion-Dollar Loss
Since rebranding as a “Bitcoin treasury company,” MicroStrategy has been steadily buying BTC using debt, equity, and operating profits. It has also introduced financial metrics focused on BTC performance such as BTC Yield and BTC Gain, which reflect the returns of its Bitcoin holding strategy.
However, the trouble began when the company implemented a new accounting rule starting in 2025: ASU 2023-08 – which requires companies to recognize the fair value of digital assets, including unrealized gains/losses, in their quarterly earnings reports.
Under the old method, the company only recognized losses if the price of Bitcoin fell below its purchase price and did not recognize gains until it sold. The new method fully exposed BTC’s volatility – which the plaintiffs allege the company deliberately downplayed or concealed.
The Lawsuit: “Misleading Statements” and Investor Damages
The plaintiffs – who represent investors who bought MicroStrategy stock between April 30, 2024 and April 4, 2025 – claim that the company inflated BTC returns without clearly warning of the downside risk from price volatility and accounting changes.
Tensions escalated on April 7, 2025, when MicroStrategy filed a report with the SEC, revealing a $5.91 billion unrealized loss due to the impact of new accounting rules and a sharp drop in BTC prices. The news sent the company's stock plunging 8% in a single day.
The lawsuit seeks to hold the company accountable for investors, alleging violations of federal securities laws by making "false or misleading" statements.
Bitcoin Still Takes Center Stage, Even in the Storm
Despite its legal troubles, MicroStrategy remains the world's largest Bitcoin holder, with more than 600,000 BTC in its vaults - worth $65 billion at current market prices.
Saylor's strategy, once hailed as a bold long-term vision, now faces a tough question: Will future returns be enough to justify the risk — or will it become a costly lesson in financial history?
