Tom Farley's Bullish, a digital asset exchange, has purchased CoinDesk from Digital Currency Group. The details of the deal have yet to be revealed. This latest CoinDesk sale demonstrates that Barry Silbert's crypto empire is in decline.
After months on the market, CoinDesk - a crypto news site - has finally been purchased by Bullish, the digital asset exchange led by ex-NYSE chief Tom Farley. Though Barry Silbert's Digital Currency Group owned CoinDesk since purchasing it in 2016 for $500,000, it appears Silbert's crypto empire is falling apart - as the all-cash deal (the terms of which remain undisclosed) was reportedly for more than $200 million, as the Wall Street Journal noted. Under the agreement, CoinDesk will remain an independent subsidiary of Bullish and is set to receive an injection of capital to aid in its growth. Silbert referred to CoinDesk as one of DCG's "best investments of all time" in a post on X, formerly Twitter, on Monday morning. Michael Casey, Coindesk's chief content officer, told CNBC that the Bullish deal was struck quickly, and that his side of the newsroom is excited for the new strategic alliance.
The existing leadership group will stay the same, but an extra layer has been added to guarantee a journalistic independence. Matt Murray, formerly Editor-in-Chief of The Wall Street Journal, will head a new editorial board created to safeguard the publication's sovereignty. CoinDesk, which was launched in 2013, is renowned in certain crypto circles for the story it broke regarding alleged balance sheet violations at Sam Bankman-Fried’s Alameda Research. This reporting incited a downward spiral at crypto exchange FTX, leading to the company and Alameda’s collapse and the eventual arrest and conviction of Bankman-Fried.
The FTX debacle’s repercussion spread to Genesis, a crypto lender owned by DCG and associated to CoinDesk, that filed for bankruptcy protection after experiencing considerable losses from FTX and hedge fund Three Arrows Capital’s fallouts. Genesis is part of a Securities and Exchange Commission indictment together with crypto exchange Gemini, and in last month New York Attorney General Letitia James took legal action against DCG and Genesis for allegedly duping investors of over $1 billion. As an effort to reclaim $620 million in unpaid loans, Genesis also sued its parent company, DCG, in September.
Silbert has also confronted issues with DCG’s pride and joy, Grayscale Investments, managing the $32 billion Grayscale Bitcoin Trust, commonly known as GBTC. In February, the Financial Times divulged that DCG was selling its assets in some Grayscale trusts in bulk at a steep reduction to assemble funds in order to pay creditors billions of dollars. Recently, Grayscale succeeded in a legal brawl with the SEC on its application to transform GBTC into a spot bitcoin exchange-traded fund. Nevertheless, there are worries about profit if the conversion is indeed approved, mostly because the firm committed to cutting prices.
At DC Fintech Week earlier this month, Grayscale’s CEO Michael Sonnenshein expressed that the company has been progressing independently with its own broker-dealer and registered investment advisor. “My concentration and my team’s concentration at Grayscale is really on the GBTC elevating itself,” he said. “We are not involved with what’s happening with DCG, Barry, or any other DCG entities themselves.” While Silbert’s power decreases, Farley’s is strengthening.
Bullish is among a limited list of three bidders contending to purchase what’s left of bankrupt crypto exchange FTX. In a CNBC interview, SEC Chair Gary Gensler stated that a refurbished FTX could potentially function if its new administration comprehends the law. “If Tom or anyone else wanted to be in this domain, I would say, ‘Do it within the law,’” Gensler declared earlier this month. “Build the trust of investors in what you’re doing and ascertain that you’re doing the proper disclosures — and also that you’re not misusing your customers’ crypto assets for your own purposes.”
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