Why Are So Many Firms Suing Strategy Over Its Bitcoin Holdings?

Bitcoin Juggernaut’s strategy faces at least five court disputes for copycat accusing society of fraud with securities regarding its BTC cash register but two professors of law said Unscramble that the number of suits is not unusual.

The law firms are trying to conduct consolidated actions for class action action, which would allow them to increase their earnings from the case, they said. In such cases, they often submit separately until the judge appoints the main prosecutor and does not combine separate actions.

“Jokej law firm as a main securities advisor, because fees can be very lucrative,” said Protam Pritchard’s University Protam Pritchard – “Tens of millions of dollars and sometimes more in the biggest cases.” “

Each action accuses the strategy, formerly Microsthegs, of misleading investors about the expected profitability and risks in buying bitcoins by making “materially false and misleading” public statements. They claim that fraud occurred within 11 months between April 30, 2024 and 4 April 2025.

The first class action was filed Pomerantz LLP on 16. May. But instead of joining the first class action, identical lawsuits were filed Gross, Bronstein, Gewirtz & Grossman, Kessler Topaz Meltzer & Checkand Levi & Corsinsky.

None of the five law firms responded to repeated requests for commentary Unscramble.

“The position of the main prosecutor is valuable,” said Ann Lipton, Professor of Law to the University of Colorado Unscramble. “The main prosecutor is controlled by litigation and selects an advisor who will eventually be an advisor to the class.

Lipton and Pritchar have stated that legal firms are bringing identical actions in such cases to promote themselves as the right company so that they can see this case.

The head of the plaintiff’s strategy

Each of the five companies sent several press releases that tried to attract more prosecutors. Many of them significantly remind you of potential participants the deadline of 15 July, when the judge selects the main applicant. As soon as this happens, the rest of the plaintiffs will be consolidated according to the plaintiff’s class.

However, the law firms do not only want many prosecutors; They want to ensure the largest possible investors, explained Pritchard. It is because Act on Reform of Judgments on Private Securities of 1995 says the courts should grant the head of the plaintiff to someone who voluntarily signed up to this role and It has the biggest losses.

“The theory is that the plaintiff with a larger skin in the game will supervise the case and lawyers,” Lipton said. “The institutions are also preferred because again it is more likely to ensure the necessary supervision.”

It is not yet clear whether one of the largest MSTR holders applied to become the plaintiffs in competing class events. From October SEC submissionThe co -founder of the strategy and executive chairman Michael Sylor is still the only largest shareholder with $ 19,998,580, worth almost $ 7.8 billion at the current price of the MSTR 389.50.

However, there are large institutions in the mix, including the Vanguard group with 8.55% bet, Black -shin and Capital International Investors with 5.8% share each, Susquehanna Securities sa 4.8% shareand Jane Street Group Sa 4.7% share in society.

The value of 592 345 BTC strategy recently climbed above $ 63 billion, according to Bitcointreasuries.net. The width of the action started after the strategy warned investors In April, it is unlikely to report Q1 profit due to nearly $ 6 billion in unrealized losses on their BTCs.

IN SECThe company said that “in future periods, he may not be able to recruit profitability, especially if we cause significant unrealized losses related to our digital assets”. The company continued to report $ 16.49 for a joint share decline in the fourth quarter.

At the beginning of April, 528 185 bitcoins had approximately $ 41.3 billion. The strategy spent an incredible $ 7.7 billion by purchasing BTC in Q1 at an average price of $ 95,000 per coin. At a time when the company needed to report on earnings Q1, the price sank the price of BTC to about $ 82,000 per coin. Since then, this writing has been reflected to about $ 107,000.

The company did not respond immediately to the request for comment Unscramble. But recognized in court disputes 8-K submission with sec.

In each of them, it repeats: “We intend to strongly defend against these claims. At this point, we cannot predict the result or provide a reasonable estimate or extent of estimates of a possible result or loss, if any, in this matter.”

Edited James Rubin