The Accounting Mess That Haunted Strategy Just Disappeared—Lawsuit Dropped With Prejudice

The legal saga surrounding Strategy’s controversial Bitcoin accounting practices has finally come to an end. Investors who filed a class action lawsuit against Michael Saylor’s firm have voluntarily withdrawn their case, according to a federal court filing in Virginia, with the dismissal marked “with prejudice”—meaning it’s officially dead and cannot be resurrected in any court.

What Was The Lawsuit Actually About?

The complaint, originally filed in May, targeted Strategy’s leadership including CEO Phong Le and CFO Andrew Kang, alleging they made misleading statements about Bitcoin investment profitability while downplaying volatility exposure. The real flashpoint, however, centered on the company’s adoption of Financial Accounting Standards Board’s ASU 2023-08—a rule change that allows firms to mark Bitcoin holdings to market value quarterly.

Before this accounting standard shift, Strategy recorded Bitcoin at cost basis. They could write down losses through impairment charges, but gains only materialized on paper unless they actually sold. The new standard flipped the script, creating quarter-to-quarter P&L swings that became the meme-worthy fodder for crypto finance discussions—literal accounting memes playing out on balance sheets.

The Numbers That Sparked Outrage

Q1 2025 laid bare the impact: Strategy reported $5.9 billion in unrealized losses as Bitcoin crashed over 11% in its weakest first quarter since 2015. Suddenly, those accounting standard debates weren’t abstract—they were real losses staring investors in the face.

Yet Strategy’s positioning shifted investor narrative from “strategic accumulation” to “we’re underwater.” The company currently holds 632,457 BTC valued at $68.69 billion, a position started back in August 2020 when Michael Saylor kicked off the corporate treasury movement.

Why The Dismissal Matters

The withdrawal suggests investors either lost confidence in their case or reached an understanding with the company. Either way, it removes a major headache for Strategy during a volatile market period.

The Ripple Effect

Strategy’s Bitcoin play didn’t just move one company—it inspired a full corporate crypto treasury trend. Firms worldwide now hold Ether, Solana, BNB, Tron, and Dogecoin on balance sheets, each facing similar accounting questions. As more companies adopt these standards, expect more accounting memes and fewer surprises like what happened to Strategy.