Investors at Bitcoin Treasury Company Inc. By withdrawing a proposed collective lawsuit, the company and its executives accused the misleading shareholders about the risks associated with its investment approach, which focuses on Bitcoin and change the last accounting base.
The issue against the strategy
Bitcoini reported that the prosecutors, led by Anas Hamza, filed a collective lawsuit in the American District Court for the Eastern Province in Virginia, against the strategy company, and co -founder Michael J. Silor, CEO Fong -Lu, and financial manager Andrew Kang as a defendant.
The case submitted by POMERANTZ LLP claimed violations of federal securities laws, specifically Article 10 (B) with the 10b-5 rule according to it, and Article 20 (A) of the Securities Exchange Act 1934. In particular, the complaint claimed that the strategy reduced the financial risks of the strategy of the accumulation of aggressive bitcoin with its failure to share the appropriate information about the expected profitability of this investment in encryption.
The lawsuit also argued that CEOs failed to reveal the potential impact of the adoption of accounting standards (ASU) No. 2023-08, which requires companies to determine encryption assets at fair market value and report fluctuations in profits directly.
Prosecutors refuse to demand voluntarily
Interestingly, in the Bloomberg Law a report On Friday, the main prosecutors and the shareholder now refused their demands against Strategy Inc. And its executives in a joint agreement. It is worth noting that the chapter applies with the biases to the appointed prosecutors, that is, this means that they cannot re -create the same claims, although this law does not extend to the members of a potential absentee category.
The lawsuit, which covers the separation period from April 30, 2024, to April 4, 2025, requested unlimited damage, legal fees, and other relief. However, the prosecutor’s decision to decline bring the case to its end without trial or settlement. In previous deposits, the strategy stated that it aims to “strongly defend” against allegations and stressed that its disclosure of the risks and accounting practices related to bitcoin was accurate and complete.
With the volunteer separation, the company avoids what would have been a long legal battle for the cabinet holder in the leading Bitcoin. The strategy had recently made a great funding from Bitcoin by selling other shares. According to what was reported, the company, led by Silor, shares of $ 359 million in new shares, using the revenues through which it can purchase 3,081.
At the time of writing this report, the strategic Bitcoin Holdings stands 632,457 and is estimated at about $ 68.5 billion. Meanwhile, MSTR is trading at $ 334.41, a price loss of 4.43 % and 10.23 %, on the last day and five days in a row.
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