MicroStrategy Inc. and three of its executives are facing a securities class action complaint in a federal district court in Virginia over allegations that the bitcoin bull duped investors about the financial risks associated with adopting fair value accounting for its cryptocurrency holdings.
Since 2020, Strategy, headquartered in Virginia, has increasingly focused on purchasing and holding bitcoin as a long-term business strategy. To achieve that aim, Strategy used proceeds from equity and debt financing, as well as cash flows from its operations, to accumulate bitcoin, which serves as its primary treasury reserve asset.