The Michael Saylor bitcoin lawsuit was dropped on August 28, 2025, when investors who had sued Strategy Inc. and its top executives voluntarily dismissed their proposed securities class action in the U.S. District Court for the Eastern District of Virginia.1Yahoo Finance. Strategy Investors Drop Lawsuit Over Bitcoin Accounting The dismissal was filed with prejudice, meaning the named plaintiffs permanently gave up the right to refile the same claims. No settlement was announced, and no reason was given.
What the Investors Alleged
The suit began in May 2025, when investor Anas Hamza filed a proposed class action against Strategy, executive chairman Michael Saylor, CEO Phong Le, and CFO Andrew Kang.2Bernlieb.com. Hamza v. Strategy Inc., Case No. 1:25-cv-00861 The complaint covered a class period from April 30, 2024, through April 4, 2025, and accused the company of making false and misleading statements about its bitcoin treasury strategy in violation of federal securities laws.
At the center of the case was a new accounting standard, FASB’s ASU 2023-08, which required companies to measure crypto holdings at fair value each reporting period and to run both unrealized gains and losses through net income.3FASB. FASB Issues Standard to Improve the Accounting for and Disclosure of Certain Crypto Assets The plaintiffs claimed that Strategy’s leaders overstated the profitability of holding bitcoin as a treasury asset and downplayed the volatility risks the new rule would surface.
They pointed to the company’s promotion of custom metrics like “BTC Yield,” “BTC Gain,” and “BTC $ Gain” as evidence that executives painted a rosy picture while omitting the “immense losses the Company could realize on its bitcoin assets” under fair value accounting. Le had called the strategy “successful” and projected annual BTC Yield of 4% to 8%. Kang described a “strong track record” of navigating volatility and said fair value accounting would bring “more transparency to the value generation and profitability of our treasury operations.”2Bernlieb.com. Hamza v. Strategy Inc., Case No. 1:25-cv-00861
The complaint also flagged stock sales during the class period. Le sold roughly 104,000 shares for nearly $16 million. Kang sold about 8,100 shares for over $2 million.2Bernlieb.com. Hamza v. Strategy Inc., Case No. 1:25-cv-00861
The $5.9 Billion Loss That Set Off the Case
Strategy adopted ASU 2023-08 on January 1, 2025. Bitcoin fell sharply in the first quarter, and the company reported a $5.9 billion unrealized loss on its digital assets for the period ending March 31, 2025.4SEC. Strategy Q1 2025 Financial Results Press Release The prior impairment model had let companies book losses when prices dropped but not mark holdings up when prices rose unless they sold; the new rule made every quarterly swing visible in earnings.3FASB. FASB Issues Standard to Improve the Accounting for and Disclosure of Certain Crypto Assets
An SEC filing disclosing the loss on April 7, 2025, sent Strategy’s stock down 8% the same day.5Crypto.news. Michael Saylor’s Strategy Hit With Class Action Lawsuit Over $5.9 Billion BTC Loss Shares fell as much as 14% after the announcement.6Bloomberg Tax. Strategy to Register $5.9 Billion Loss After Accounting Change Hamza filed his complaint about six weeks later.
How the Lawsuit Was Dismissed
The end came through a joint stipulation of voluntary dismissal filed on August 28, 2025. Co-lead plaintiffs Michelle Clarity and Mehmet Cihan Unlusoy, along with original plaintiff Anas Hamza, signed off on dropping the case with prejudice.1Yahoo Finance. Strategy Investors Drop Lawsuit Over Bitcoin Accounting Because dismissal was with prejudice, those plaintiffs cannot bring the same claims again.
The case had never been certified as a class action, so the dismissal binds only the named plaintiffs and does not release the claims of other Strategy shareholders as a group.7TradingView (Cointelegraph). Strategy Bitcoin Lawsuit Dismissed as Investors Withdraw Case No settlement terms were disclosed. The plaintiffs’ attorneys did not comment on why they walked away.1Yahoo Finance. Strategy Investors Drop Lawsuit Over Bitcoin Accounting No separate consequences for Le or Kang beyond their status as co-defendants were reported.8Crypto.news. Investors Withdraw Lawsuit Against Strategy Over Bitcoin Accounting Practices
What the Dismissal Does and Doesn’t Cover
The dismissal closes the securities case built around Strategy’s bitcoin accounting disclosures. It doesn’t touch a separate legal matter that is sometimes conflated with it: the District of Columbia’s tax fraud action against Saylor, which alleged he had evaded D.C. income taxes by falsely claiming residency elsewhere. That case was resolved earlier, in May 2024, when Saylor and MicroStrategy agreed to pay $40 million under a consent order that contained no admission of liability.9DC Office of the Attorney General. Attorney General Schwalb Secures $40 Million The 2025 investor lawsuit and the 2024 tax settlement are distinct proceedings with different parties, courts, and claims.
Because the securities dismissal came without a court ruling on the merits, it produced no finding on whether the company’s statements about its bitcoin strategy were misleading. It ended the litigation and nothing more.