Investors Drop Lawsuit Against Strategy Over Bitcoin Accounting Practices—Market Sighs in Relief

Legal pressure evaporates as plaintiffs withdraw claims against Strategy’s controversial Bitcoin bookkeeping.

Behind the Numbers

The suit—which accused the firm of creative Bitcoin valuation methods—collapsed faster than a shitcoin in a bear market. Plaintiffs filed to dismiss all allegations just weeks before a key court deadline.

No financial penalties were disclosed. No admissions of wrongdoing. Just another day in crypto-accounting—where the rules are made up and the audits don’t matter.

Regulatory Whispers

Industry watchers aren’t surprised. When your balance sheet’s built on digital assets, even the SEC treads lightly. Strategy’s legal team spun it as a 'validation of compliance rigor.' Critics called it 'legal luck.'

Bitcoin’s price? Barely blinked. Because when you’re hedging against fiat collapse, a little accounting drama is just background noise.

Accounting shift and mounting criticism

Earlier this year, Strategy adopted the Financial Accounting Standards Board’s Accounting Standards Update No. 2023-08, which governs the accounting for crypto assets. The shift to fair value accounting allowed the company to record its massive Bitcoin holdings at their market value each quarter, with unrealized gains and losses flowing directly into the net income statement.

Plaintiffs argued the company failed to fully disclose how this WOULD affect its reported earnings, pointing to Strategy’s $4.22 billion net loss in the first quarter of 2025 as proof that the accounting method was being presented to investors in a misleading light.

In addition to the lawsuit, Strategy has faced scrutiny on other fronts. Earlier this month, a prominent Wall Street advisor criticized the company for comparing its valuation metrics to tech giants like Apple and Nvidia, arguing that its recent performance was fueled by a one-time surge in Bitcoin rather than sustainable revenue growth.

The rebuke underscored the growing skepticism from parts of the financial establishment about whether Strategy’s unique model should be benchmarked against conventional corporate peers at all.

Despite the criticisms, Strategy remains the largest corporate holder of Bitcoin, with 632,457 BTC on its balance sheet, worth about $68.32 billion according to BitcoinTreasuries.net.

On August 25, Michael Saylor highlighted that the firm’s proprietary Bitcoin Yield metric had climbed to 25.4% year-to-date, framing it as evidence of long-term shareholder value tied to Bitcoin accumulation.