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Tuesday, November 21st, 2023 3:12 pm EDT
Key Points
- Acquisition by Bullish:
- Bullish, a digital asset exchange led by ex-NYSE chief Tom Farley, has acquired crypto news site CoinDesk from Barry Silbert’s Digital Currency Group (DCG).
- CoinDesk will operate as an independent subsidiary of Bullish, and the terms of the all-cash deal have not been disclosed.
- DCG’s Crypto Challenges:
- DCG initially acquired CoinDesk for $500,000 in 2016. Earlier this year, DCG reportedly received unsolicited offers exceeding $200 million for CoinDesk.
- CoinDesk began exploring a possible sale in January and, in July, a $125 million purchase agreement from a consortium of investors fell through.
- In August, CoinDesk laid off around 16% of its staff. DCG’s founder Barry Silbert called CoinDesk one of DCG’s “best investments of all time.”
- Challenges at DCG Entities:
- CoinDesk’s challenges are part of a broader set of issues within DCG entities.
- CoinDesk’s reporting on potential balance sheet improprieties at Alameda Research triggered a downward spiral at crypto exchange FTX, leading to its collapse and the arrest of Sam Bankman-Fried.
- FTX’s collapse affected CoinDesk sister company Genesis, a crypto lender owned by DCG, which filed for bankruptcy protection after losses from the FTX and Three Arrows Capital collapses.
- Genesis is facing an SEC charge alongside crypto exchange Gemini, and the New York Attorney General filed a suit against DCG and Genesis for alleged investor fraud exceeding $1 billion.
- DCG’s crown jewel, Grayscale Investments, faced challenges as DCG sold Grayscale trusts at a discount to pay creditors. Grayscale recently won a legal battle with the SEC over converting GBTC into a spot bitcoin ETF, but concerns about profitability persist.
Crypto news site CoinDesk has been acquired by Bullish, a digital asset exchange led by former NYSE chief Tom Farley, from Barry Silbert’s Digital Currency Group (DCG). The terms of the all-cash deal have not been disclosed. CoinDesk will operate independently as a subsidiary of Bullish. DCG initially acquired CoinDesk for $500,000 in 2016 and reportedly received unsolicited offers exceeding $200 million earlier this year. After an unsuccessful $125 million purchase agreement in July, CoinDesk laid off around 16% of its staff in August. Bullish plans to inject capital into CoinDesk to scale its operations. The existing management team will remain, and a new editorial committee, led by former Wall Street Journal editor-in-chief Matt Murray, will oversee journalistic independence.
CoinDesk, known for breaking stories in the crypto universe, including potential balance sheet improprieties at Alameda Research, faced challenges due to the FTX collapse. CoinDesk sister company Genesis, a crypto lender owned by DCG, filed for bankruptcy after losses from FTX and Three Arrows Capital’s collapses. DCG and Genesis are being sued by the New York Attorney General for alleged investor fraud. Silbert also faced challenges at Grayscale Investments, DCG’s crown jewel. DCG sold Grayscale trusts at a discount to pay creditors, and Grayscale won a legal battle with the SEC for GBTC’s spot bitcoin ETF conversion. Meanwhile, Bullish, led by Farley, is among the bidders for the remains of the bankrupt FTX. Farley’s influence is rising as Silbert’s wanes.
Key Points:
- Acquisition Details:
- Bullish, led by ex-NYSE chief Tom Farley, acquires CoinDesk from Digital Currency Group (DCG) in an all-cash deal. CoinDesk will operate independently as a subsidiary of Bullish.
- Terms of the acquisition remain undisclosed, but the Wall Street Journal reported it to be an all-cash transaction.
- DCG initially acquired CoinDesk for $500,000 in 2016 and received unsolicited offers exceeding $200 million earlier this year.
- CoinDesk’s Recent Challenges:
- CoinDesk faced challenges, including a failed $125 million purchase agreement in July, leading to layoffs of around 16% of its staff in August.
- The crypto news site is known for breaking stories, including potential balance sheet improprieties at Alameda Research, contributing to the FTX collapse.
- Bullish’s Plans and Leadership Changes:
- Bullish, under Tom Farley’s leadership, plans to inject capital into CoinDesk to scale its operations.
- CoinDesk’s existing management team will remain, and a new editorial committee, led by former Wall Street Journal editor-in-chief Matt Murray, will ensure journalistic independence.
- DCG’s Challenges and Legal Issues:
- DCG and its crypto lender, Genesis, faced challenges following the FTX collapse, leading to Genesis filing for bankruptcy.
- DCG and Genesis are being sued by the New York Attorney General for allegedly defrauding investors of over $1 billion.
- Grayscale Investments and Silbert’s Challenges:
- DCG’s crown jewel, Grayscale Investments, faced challenges as DCG sold Grayscale trusts at a discount to pay creditors.
- Grayscale won a legal battle with the SEC for the conversion of GBTC into a spot bitcoin ETF, but concerns about profitability arise.
- Bullish’s Role in Crypto Landscape:
- Bullish, under Farley’s leadership, is among the bidders for the remains of the bankrupt FTX, indicating Farley’s rising influence.
- SEC Chair Gary Gensler commented on a potential revived FTX, emphasizing compliance with the law and proper disclosures.
- Industry Dynamics:
- The acquisition and related developments reflect the evolving dynamics within the crypto industry, with leadership changes, legal challenges, and the impact of market conditions influencing major players like CoinDesk, DCG, and Grayscale Investments.
For the full original article on CNBC, please click here: https://www.cnbc.com/2023/11/20/barry-silbert-sells-coindesk-to-ex-nyse-president-.html
