alleging

In brief

A lawsuit against Bitcoin treasury Strategy has been scrapped.
Much like a different lawsuit dismissed in August, this one alleged shady accounting practices.
A number of lawsuits have been brought against Strategy this year, Decrypt previously reported.

Another shareholder lawsuit alleging dodgy accounting practices at Bitcoin treasury giant Strategy has been dropped, court documents show.

Documents filed Wednesday show the scrapped case, brought in June by shareholders Abhey Parmar and Zhenqiu Chen, had alleged breaches of fiduciary duties, unjust enrichment, abuse of control, and gross mismanagement in the company.

The dismissal comes just weeks after a different class-action lawsuit accusing the company of misleading shareholders about how new accounting rules would affect its profitability was scrapped. That lawsuit, filed in May, was similar to the June one dismissed Wednesday.

A number of law firms and stockholders this year filed lawsuits against the company, alleging securities fraud over misleading Bitcoin investment statements.

Experts told Decrypt that it wasn’t unusual for law firms to file identical lawsuits against a company, as they vied to become lead counsel in a consolidated case.

Strategy—formerly MicroStrategy—is the world’s biggest corporate holder of Bitcoin, with a stash of 638,460 digital coins worth $72.5 billion at today’s prices.

The company mainly used to sell data analysis software, but now buys and holds Bitcoin and lets investors buy shares of its Nasdaq-listed stock (MSTR) to get exposure to the cryptocurrency, dubbing itself a Bitcoin treasury firm.

Company co-founder Michael Saylor was turned on to Bitcoin in 2020, bought it, and claimed it was the best way to store value and save shareholders’ money.

Strategy stock has since soared. It was trading for $14 the day the company first bought Bitcoin in August 2020 and it’s now trading for $362—a 2,160% increase.

Strategy has in the past run into trouble with regulators. In 2000, Saylor, who was Strategy CEO at the time, co-founder and Chief Operating Officer Sanjeev Bansal, and former Chief Financial Officer Mark Lynch settled a case with the SEC, without admitting or denying charges of overstating the company’s revenue and earnings.

The three paid $10 million in disgorgement and $1 million in penalties.

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If you’re shopping at Home Depot, you might want to watch out for facial recognition at the check-out counter. Benjamin Jankowski, a resident of Chicago, Illinois, is taking Home Depot to court after spotting the hardware store’s self-checkout kiosks using facial recognition without customers’ consent.

The class action lawsuit, filed on August 1, claims that Home Depot is violating Illinois’ 2008 Biometric Information Privacy Act (BIPA), and asks the court for up to $5,000 in damages from Home Depot for every violation. Considering there are 76 Home Depot locations across Illinois, those fines could total well into the millions if Jankowski wins the case.

On June 22, Jankowski visited his local Home Depot in Chicago and had to use a self-checkout kiosk since no cashiers were available. While checking out, Jankowski noticed a camera and display above the kiosk, where his face was surrounded by a green box, a common sign of facial recognition. Jankowski took a photo of the display, noting that there were no signs or notices around the store to warn customers that Home Depot was collecting biometric data.

That goes against the requirements of the Biometric Information Privacy Act, which is designed to protect Illinois residents’ biometric data from collection and misuse by businesses. BIPA requires businesses to get written consent to collect or disclose biometric identifiers, destroy that biometric data at a certain point, and store it securely in the meantime.

A 2019 case, Rosenbach v. Six Flags, set the precedent for Illinoisans to sue companies just for unlawfully collecting their biometric data based on BIPA. In that case, a mother sued Six Flags for taking her son’s fingerprints without BIPA-compliant notice and consent. Even though Six Flags didn’t cause “actual injury” by misusing that biometric data in some way, the court still found that it committed a “technical violation” of BIPA worthy of awarding damages to Rosenbach.

That was a similar situation to what Jankowski is claiming happened during his visit to Home Depot. Both cases highlight the importance of getting people’s permission before even collecting their biometric data, regardless of how it’s used. Home Depot’s VP of Asset Protection, Scott Glenn, emphasized in a 2024 interview that the company’s use of computer vision is for security purposes, specifically stopping theft.

Even so, many people may be uncomfortable with their biometric data getting collected without their knowledge or permission. After all, if that data is somehow compromised, people have no way to change biometrics like you would change a stolen password. Of course, almost any store you go into these days could be collecting your biometric data, but as Jankowski’s case highlights, shoppers have a right (at least in Illinois) to get a fair warning about that data collection.

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Bitcoin Giant Strategy Dodges Another Lawsuit Alleging Accounting Wrongs

In brief

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Chicago man sues Home Depot, alleging it’s secretly using AI facial recognition at self-checkout