Strategy, formerly known as MicroStrategy, is currently facing several legal actions initiated by multiple firms. Five law firms have accused Strategy of misleading investors.
Accusations of Securities Fraud
Strategy has been accused of securities fraud pertaining to its Bitcoin treasury built over the past five years. The plaintiffs allege the firm made misleading investment statements regarding Bitcoin and its own business and operational prospects.
According to representatives from Bronstein, Gewirtz & Grossman, LLC, 'the anticipated profitability of the Company’s bitcoin-focused investment strategy and treasury operations was overstated.'
Additionally, Strategy has been accused of underreporting various risks associated with Bitcoin’s volatility and failing to disclose potential losses from its digital assets.
Acquisition of Additional Bitcoin
Shortly after the allegations, Strategy added 245 Bitcoin units at a cost of around $26 million. CEO Michael Saylor announced that each digital coin was purchased at an average price of $105,856. To date, the company has accumulated a total of 592,345 BTC, collectively worth nearly $60 billion based on the current market value.
Metaplanet's Bitcoin Accumulation Strategy
Another company actively accumulating Bitcoin is Metaplanet, also known as Asian MicroStrategy. This Japanese financial giant recently purchased 1,111 Bitcoins for approximately $118.2 million at a similar time as Strategy's acquisition. Each unit was acquired at an average price of $106,408. Metaplanet now holds 11,111 BTC, worth about $1.12 billion at current prices, reflecting a strong return on investment.
The controversies surrounding Strategy highlight the risks associated with Bitcoin investments and emphasize the need for transparency in financial reporting by companies dealing with cryptocurrencies.
