coindesk.com
David Bailey’s Nakamoto (NAKA) now owes Kraken more than the stock market says the whole company is worth, and it just bought itself another year to deal with it.
Nakamoto’s main business is holding bitcoin. It owes crypto exchange Kraken 165 million $USDT, the dollar-pegged stablecoin issued by Tether, on a loan backed only by its bitcoin. Its shares closed Thursday at $5.79, giving the company a market value of about $104 million.
Under an amendment signed Wednesday and disclosed in an 8-K filing on Thursday, the 60 million $USDT that was due Dec. 4 now matures Dec. 4, 2027. The other 105 million $USDT is still due June 30, 2027, so Nakamoto has nothing left to repay this year.
Kraken also agreed to count the net value of Nakamoto’s bitcoin derivatives positions, including put options that pay off if $BTC’s price falls, toward the loan's collateral requirements.
“This amendment extends our runway and makes our collateral position more resilient,” Tyler Evans, Nakamoto’s chief investment officer, said in a statement.
How thin the cushion is
Nakamoto’s quarterly report, filed this week, shows 3,030 of its 4,283 bitcoin were pledged to Kraken at the end of September. They were worth about $253 million then, with bitcoin near $83,500.
At Friday’s price under $69,000, those coins are worth roughly $208 million, about 126% of what Nakamoto owes, according to CoinDesk calculations.
If that value falls below a set maintenance level, Nakamoto has to repay part of the loan, pledge more bitcoin or both. Nakamoto has about 1,253 unpledged bitcoin left to post, worth roughly $86 million at today’s price.
That’s where the options come in. Under the new terms, Kraken calculates the net value of Nakamoto’s pledged derivatives account every day and counts it toward those tests, with any net negative value counted as zero.
At the end of September, Nakamoto had sold call options on 2,150 bitcoin at strikes between $80,000 and $110,000, collecting premiums in exchange for giving up gains above those prices.
It had also bought put options on 2,000 bitcoin at $55,000 that expire Dec. 25. The whole book was worth minus $6 million at quarter-end, which would have counted for nothing under the new terms.
The loan started last December at $210 million and 8% a year, when Nakamoto held nearly 5,400 bitcoin. It sold 284 $BTC in March to fund operations, then about 600 more in the second quarter, sending $45 million of the proceeds back to Kraken.
