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Crypto news site CoinDesk explores potential sale as parent company faces crisis
The cryptocurrency publication CoinDesk is reportedly exploring a potential partial or full sale and hired investment bankers at Lazard Ltd. to make that happen.
CoinDesk Chief Executive Kevin Worth confirmed to The Wall Street Journal that there has been a lot of interest in buying the media company.
“Over the last few months, we have received numerous inbound indications of interest in CoinDesk,” Worth told the Journal in an emailed statement.
CoinDesk, which launched in 2013, is owned by parent company Digital Currency Group Inc., or DCG, which acquired the crypto media publication in 2016 for $500,000. CoinDesk generated about $50 million in revenue last year from online advertising as well as from its crypto markets index and live events.
According to people familiar with the company, DCG has received several unsolicited offers north of $200 million in the past few months, the Journal reported.
CoinDesk is best known for being the first outlet to report on the balance sheet mismanagement at Sam Bankman-Fried’s quantitative trading company Alameda Research. This report led to a series of events that ultimately toppled the crypto exchange FTX, leading to its collapse and bankruptcy, the arrest of Bankman-Fried and increased regulatory scrutiny.
Crypto lender Genesis Global Trading Inc., a sister company to CoinDesk, which is also owned by DCG and may be facing bankruptcy, was also caught up in the aftermath of the FTX meltdown as it tries to raise capital to pay creditors. The company was forced to suspend its crypto lending its lending unit in the wake of the collapse of FTX due to having over $175 million of its assets locked on the exchange. The company also was hurt by the collapse of the crypto hedge fund Three Arrows Capital in June, when it reported it could be facing considerable losses of “hundreds of millions” at the time.
In order to keep itself afloat, Genesis also laid off 30% of its staff at the beginning of this year.
Other DCG-owned businesses have also been troubled amid falling crypto markets. For example, fund manager Grayscale Bitcoin Trust an investment vehicle managed by DCG’s Grayscale Investments LLC, saw its net asset value fall by 63% in the past year following a similar drop in bitcoin market value.
DCG owns almost 200 other crypto companies, including the crypto exchange Luno, the advisory firm Foundry and the programmable trading solution company TradeBlock, according to its website.