Schiff asks SEC to probe STRC, calls it a Ponzi

Peter Schiff filed a complaint with the Securities and Exchange Commission on May 11, 2026, asking regulators to investigate MicroStrategy’s Strategy preferred share, ticker STRC. In the filing he described the security as a ‘centralized Ponzi’ and argued that its marketing to retirees was misleading.

In the complaint Schiff argued STRC does not have an underlying earnings stream to support its distributions. He wrote that payouts depend on market flows and changes in Bitcoin’s price rather than predictable corporate revenue or operating profit.

Schiff told regulators that the planned distributions appear to rely on new capital entering the instrument. He flagged the volatility of MicroStrategy’s Bitcoin holdings as a material risk to principal for investors seeking capital preservation and steady income.

On social media Schiff wrote: “How can the SEC let @Saylor get away with public comments that $STRC is suitable for retirees whose primary investment objectives are low‑risk wealth preservation and income, and who don’t want to risk losing principal? This is a violation of SEC antifraud and marketing rules.” He also described STRC as “a classic centralized Ponzi run by $MSTR.”

Michael Saylor pushed back on the allegations on social platforms, suggesting Schiff opposes the broader crypto industry. Schiff responded by distinguishing his critique of Bitcoin’s economic model from his specific complaint about STRC’s structure.

MicroStrategy, identified in filings as Strategy, slowed the pace of its Bitcoin purchases after several years of accumulation, a shift that analysts have noted. The company remains one of the largest corporate holders of Bitcoin.

Other firms are raising capital to support corporate Bitcoin treasury operations. For example, Adam Back’s Capital B has been active in the market. Those vehicles use different legal structures but also expose investors to movements in Bitcoin’s price.

Schiff’s complaint asks the SEC to consider whether Saylor’s public statements breached antifraud and marketing rules by presenting STRC as suitable for low‑risk, income-focused investors. The agency has not provided a public response to the filing.

STRC is a preferred share tied to a corporate Bitcoin treasury strategy and has been promoted as providing controlled distributions. Supporters say such securities offer structured access to Bitcoin price moves; critics argue they present volatile crypto exposure in a form that may appear to offer fixed income.