The chairman of Nasdaq-listed Bitcoin treasury firm Nakamoto, David Bailey, has dismissed allegations of misconduct following the company’s 99% stock crash. Critics claim retail investors were used as exit liquidity during a lucrative merger and that recent acquisitions lacked shareholder approval. The controversy emerges as broader Bitcoin treasury inflows have waned, potentially affecting market sentiment.
David Bailey, Chairman and CEO of Nakamoto (Nasdaq: NAKA), has dismissed allegations of a scam as *”noise on Twitter.”* This follows the firm’s stock crashing 99% from its May 2025 high. Bailey recently announced Nakamoto’s acquisition of BTC Inc. and UTXO Management, firms he also founded.
The community backlash stems from a merger with KindlyMD that caused the stock to surge over 1,400%. Analyst Justin Bechler stated early investors bought shares as low as $1.12 while retail paid $28 or more. The deal helped Bailey raise approximately $710 million in financing before those investors sold, contributing to the steep decline.
Furthermore, critics allege the firm entered risky, overcollateralized loan agreements jeopardizing its 5,765 BTC. They also claim the buyouts of BTC Inc. and UTXO Management did not involve shareholder approval. Reacting to the allegations, analyst Felix Jauvin cautioned the industry must pay for its “DAT sins.”
Concurrently, the market value of Nakamoto’s Bitcoin holdings has fallen below its enterprise value. Overall demand from Bitcoin treasuries has also weakened after a brief recovery attempt in January. This trend among key corporate holders could challenge Bitcoin’s price recovery prospects amid fluctuating ETF flows.
