Obscure Stock Pumps $1,000% After Firm Touts $1.7 Billion Bitcoin Buy—Is It Legit?

A little-known investment holding company has announced its intent to take billions of dollars in Bitcoin (BTC) off the market—but crypto fanatics think the news is too bullish to be true.

Nilam Resources (NILA)—a self-described investment holding company focused on “frontier technologies”—said it signed a letter of intent to acquire 24,800 BTC on Monday. The bold plan follows its acquisition of MindWave, a special-purpose entity, from the Mauritas-based connectivity firm Xyberdata.

That’s a Bitcoin buy worth $1.72 billion at today’s prices, carrying a potentially powerful demand shock. But it also raised questions about how the company can afford that sort of purchase, given that the self-reported market cap of Nilam Resources is less than $25 million, per the company’s website.

The company’s press release says it plans to issue a “newly authorized Preferred Class of Series C Stock” to acquire the coins at a “discounted rate” relative to Bitcoin’s current price, up 57% since the start of the year.

“The Company and team have been working diligently over the last several months to finalize all agreements and due diligence necessary to proceed to a legally binding Letter of Intent (LOI)," said Pranjali More, CEO of Nilam Resources.

For Crypto Twitter, details surrounding the announcement didn't add up. Why announce the intended purchase before actually acquiring the coins? Why specify the exact number of coins that will be acquired rather than the amount of money spent on them?

The company’s details seem hazy as well. One version of the site, NILA Holdings, lists an office address in Snohomish, Wash., and says it is an investment holding company, while another “unofficial” site depicts it as a South American gold miner.

In its press release, Nilam described Bitcoin as the new “Gold Standard” and the future of digital transactions. The announcement had been published on the Nasdaq website, but has apparently been removed.

Some believe the answer to Nilam’s mystery lies in a look at its OTC-traded stock, NILA, which traded for under $0.02 with a market cap float of $8.5 million after Monday’s close.

At Tuesday’s open following its Bitcoin acquisition announcement, the stock surged to $0.18 – a 990% climb – while volume for the stock rose to several hundred times its daily average.

“What scam is this?” asked Matthew Sigel, Head of Digital Asset Research for VanEck US. “Issue LOI to buy #bitcoin, stock pumps, issue equity, profit?”

Neither More nor Nilam Resources responded to a request for comment from Decrypt.

Edited by Ryan Ozawa.