The $110 Billion Crypto Treasury Boom: Litigation Risks on the Horizon

The corporate crypto treasury trend continues to boom, and with it the litigation risks. As noted in a recent Forbes article, 152 publicly traded companies now control almost 1 million Bitcoin worth over $110 billion. This explosive growth, led by pioneers like Michael Saylor's Strategy (formerly MicroStrategy), has created a new category of investment vehicles and with it a new category of litigation challenges.

From Hotels to Crypto

The sheer diversity of companies stockpiling crypto assets is remarkable. Consider Metaplanet, a struggling Japanese budget hotel operator that executed a complete corporate pivot to become "Asia's MicroStrategy," transforming its last remaining property into the "Bitcoin Hotel" while accumulating over 18,800 BTC. Its stock has surged over 400% since launching its Bitcoin strategy. Similarly, CEA Industries, a Canadian vape manufacturer, saw shares surge over 550% in late July 2025 after announcing a $500 million strategy to accumulate Binance-associated BNB tokens.

These dramatic corporate transformations demonstrate how aggressively companies are pursuing crypto treasury premiums—while simultaneously creating new categories of potential litigation risk.

Litigation Reality Check

The risks are already materializing. Several law firms have filed complaints against Strategy, alleging securities fraud. The cases allege that Strategy misrepresented the profitability and understated the volatility risk of its Bitcoin strategy. They focus in particular on Strategy's $5.9 billion unrealized loss disclosed in Q1 2025, stemming from the adoption of ASU 2023-08 which required Strategy to report billions in tax liabilities relating to unrealized fair value gains on its Bitcoin holdings.

The Legal Storm Ahead

With this proliferation of crypto treasury adoptions across diverse industries, we anticipate additional securities class actions alleging misrepresentation of crypto investment risks and profitability; possible breach of fiduciary duty claims concerning treasury strategy decisions and related M&A activities; and evolving enforcement dynamics, including involving state securities regulators. We'll continue monitoring developments in this rapidly evolving space.