Crypto News Outlet CoinDesk may need to sell its site

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CoinDesk is reportedly mulling a potential sale as its parent company Digital Commodities Group reels from the FTX fallout, which was ironically first revealed by CoinDesk. Image: IgorGolovniov (Shutterstock)

The folks at CoinDesk were just too good at their job. The crypto news site was the first to poke holes in the Sam Bankman-Frieds crypto sandcastle that used to be FTX, but now the company that owns the crypto news site is reportedly exploring a sell-off in part because of the fallout from the failed and allegedly fraudulent venture of Bankman-Frieds.

The Wall Street Journal first reported on Wednesday evening that CoinDesk and its parent company Digital Currency Group were considering putting the company up for sale. Specifically, the report notes that CoinDesk has retained the services of investment bank Lazard to help it explore a partial or full sale of its company.

Gizmodo contacted CoinDesk for comment, but attorneys representing the company did not immediately respond. CoinDesk CEO Kevin Worth confirmed to the Journal that his site has received multiple indications of interest. DCG also did not immediately respond to a request for comment.

WSJ wrote based on unnamed sources familiar with internal discussions that DCG has received unsolicited company-wide offers for more than $200 million in the past few months alone. That’s even though DCG bought CoinDesk for $500,000 in 2016, according to those same unnamed sources. CoinDesk made around $50 million in revenue last year.

But reports from the folks at CoinDesk have been integral in exposing the full scale of alleged fraud occurring at one of the world’s largest crypto firms. In November, Ian Allison, owner of CoinDesks, first reported, based on internal documents, that Alameda Research, which was the hedge fund Bankman-Frieds, relied heavily on the native FTT token of FTX exchanges. . This was the first domino to fall in what would become a brand new crypto calamity showing that the founder of FTX withdrew user funds from his exchange and routed them to Alameda. Bankman-Fried is now awaiting a federal trial on eight counts of fraud and conspiracy.

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These events created another crisis for the crypto industry as a whole, including at DCG. This has also impacted sites that cover technology and crypto. CoinDesk management told The New York Times that their reporters cover DCG like any other crypto entity. Other sites, like the fledgling news outlet Semafor, have talked about selling the investments Bankman-Fried and FTX have made with the company.

DCG was once a $10 billion crypto venture led by leading crypto investor Barry Silbert. The company owns several notable crypto-related companies other than CoinDesk, including Grayscale Investments, an investment management firm and manager of the Grayscale Bitcoin Trust, as well as bitcoin mining company Foundry Digital. The value of trusts has fallen 51% in the past year and its assets have fallen from more than $40 billion in 2021 to around $13.1 billion, according to Grayscales’ own metrics.

The group also owns crypto lender Genesis, which had to stop repayments and lending due to the FTX collapse. The lender admitted in November that it had $175 million in funds locked up on FTX.

Genesis was recently cited by the Securities and Exchange Commission for allegedly selling unregistered securities through its Genesis Earn loan program. Since the start of 2023, the lender has cut 30% of its workforce in the second wave of layoffs in less than a year. The company is also reportedly considering bankruptcy.

So yeah, things haven’t gone well for DCG properties, but CoinDesk is a big reason for that. It’s a shame that the people tasked with showing how rocky the whole crypto industry was and continues to be also have their jobs in jeopardy.

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