Investors dismiss lawsuit against Strategy over $6B Bitcoin unrealized loss

A lawsuit against Michael Saylor’s Strategy, initiated by investors who alleged the company misled them over its Bitcoin strategy and accounting rules, has been dismissed, according to a legal filing submitted to federal court in Virginia.

Court records show the lead plaintiffs, represented by Cohen Milstein Sellers & Toll and Pomerantz LLP, voluntarily withdrew the case. The dismissal, first reported by Bloomberg Law on Friday, is with prejudice, meaning it cannot be refiled in its current form.

Strategy investors brought the lawsuit in May against the company and its executives, including Michael Saylor, CEO Phong Le, and CFO Andrew Kang. They alleged that Strategy failed to disclose that adopting the new accounting standards, the Financial Accounting Standards Board’s ASU 2023-08, would result in a multibillion-dollar unrealized loss.

Strategy posted nearly $6 billion in unrealized losses on Bitcoin and other crypto holdings in Q1 2025, as a sharp market downturn weighed on results. Bitcoin slid almost 12% in the quarter, its weakest first-quarter performance since 2015.

In Q2 2025, Strategy achieved a record net income of $10 billion and operating income of $14 billion, primarily from gains on Bitcoin investments.

Strategy currently holds 632,457 BTC worth around $68 billion. The company’s shares have increased by around 153% in the past year, per Yahoo Finance data.