The cryptocurrency community is currently embroiled in controversy surrounding Nakamoto (NAKA), a Bitcoin treasury firm whose stock has plummeted by 99%. Despite mounting allegations of financial misconduct and manipulative practices, CEO David Bailey has publicly dismissed the intense criticism as mere "noise on Twitter." This situation has sparked widespread concern, not only among investors but also within the broader Bitcoin industry, over the firm's opaque dealings and potential damage to its reputation.
Nakamoto's Questionable Financial Maneuvers
The firm's troubles intensified after a May 2025 merger with KindlyMD, which saw NAKA's stock artificially surge from $2 to over $30 within days, generating a 1,400% gain. Analysts highlighted a stark disparity in share pricing: early investors allegedly secured shares at a significantly lower price (e.g., $1.12 or $5) compared to retail investors who bought at $28 or more. This arrangement reportedly allowed Bailey to raise substantial financing, including $510 million and $200 million in convertible notes. Critics claim that these early investors then promptly dumped their shares upon the merger's finalization in August, leaving retail investors with massive losses as the stock crashed. Further allegations include Nakamoto entering into overcollateralized loan agreements that could risk the forfeiture of 5,765 BTC, potentially at shareholders' expense, and the acquisition of BTC Inc. and UTXO Management without necessary shareholder approval.
Broader Implications for the Bitcoin Industry
Nakamoto's financial woes are compounded by the declining market sentiment surrounding BTC treasuries. The firm's market-to-NAV (mNAV) has fallen below 1, indicating that its BTC holdings are now worth less than its enterprise value, signaling bearish market outlook. This decline reflects a broader trend of waning demand from BTC treasuries, which, alongside fluctuations in ETF flows, could undermine Bitcoin's overall price recovery efforts. Ultimately, critics like analyst Felix Jauvin warn that Nakamoto's actions could significantly harm the Bitcoin industry's credibility and image, suggesting a period of reckoning for past "sins" before the sector can regain serious standing.
