December 3, 2023

Barry Silbert, Founder and CEO, Digital Currency Group 

David A. Grogan | CNBC

After months on the market, crypto news site CoinDesk has finally been acquired by a business that’s run by the former president of the New York Stock Exchange.

Bullish, a digital asset exchange led by ex-NYSE chief Tom Farley, has purchased CoinDesk from Barry Silbert’s Digital Currency Group. It’s the latest sign that Silbert’s crypto empire, which had vaulted its founder into the billionaire ranks, continues to fall apart.

CoinDesk will operate as an independent subsidiary of Bullish. Terms of the purchase haven’t been disclosed, but the Wall Street Journal reported that it’s an all-cash deal.

DCG, which first acquired CoinDesk for $500,000 in 2016, reportedly received several unsolicited offers for more than $200 million for the news site earlier this year. CoinDesk first began looking into a possible sale in January, enlisting the help of advisors at Lazard. In July, however, a $125 million purchase agreement from a consortium of investors fell through.

In August, CoinDesk reportedly laid off around 16% of its staff. Farley said Bullish “will immediately inject capital” into the media company to help scale the operation.

Silbert called CoinDesk one of DCG’s “best investments of all time,” in a post on X, formerly Twitter, Monday morning.

Michael Casey, Coindesk’s chief content officer, told CNBC that the Bullish deal came together “very quickly,” and that his side of the newsroom is excited for the new strategic alliance.

Thomas Farley

Anjali Sundaram | CNBC

The existing management team will remain in place, though an extra layer has been added to ensure journalistic independence. Matt Murray, who was previously the editor-in-chief of The Wall Street Journal, will head a newly formed editorial committee designed to protect the publication’s autonomy.

CoinDesk, which launched in 2013, is best known in parts of the crypto universe for breaking the story about potential balance sheet improprieties at Sam Bankman-Fried’s Alameda Research. That reporting sparked a downward spiral at crypto exchange FTX, ending with the collapse of the company and Alameda that month, and the arrest and ultimate conviction of Bankman-Fried.

The contagion from the FTX meltdown hit CoinDesk sister company Genesis, a crypto lender also owned by DCG that filed for bankruptcy protection after suffering crippling losses from the collapses of FTX and hedge fund Three Arrows Capital.

Genesis is the subject of a Securities and Exchange Commission charge alongside crypto exchange Gemini. Last month, New York Attorney General Letitia James filed suit against DCG and Genesis for allegedly defrauding investors of more than $1 billion. Meanwhile, Genesis sued its parent company, DCG, in September in an effort to recover $620 million in unpaid loans.

Silbert has also faced challenges at DCG’s crown jewel, Grayscale Investments, which manages the $32 billion Grayscale Bitcoin Trust, better known by its ticker GBTC.

In February, the Financial Times first reported that DCG was selling its holdings in several Grayscale trusts at a steep discount to shore up funds to pay back its creditors billions of dollars.

Grayscale recently won a legal battle with the SEC over its application to convert GBTC into a spot bitcoin exchange-traded fund. Should the conversion ultimately be approved, however, there are concerns about profitability, in part because the company has committed to cutting fees.

Earlier this month at DC Fintech Week, Grayscale CEO Michael Sonnenshein said the company has been growing as an independent organization with its own broker-dealer and registered investment advisor.

“My focus and my team’s focus at Grayscale is really on the GBTC uplifting itself,” he said. “We’re not involved in what’s transpiring with DCG, or with Barry, or with any of the other DCG entities themselves.”

While Silbert’s influence fades, Farley’s is on the rise.

Bullish is among a short list of three bidders vying to buy what remains of bankrupt crypto exchange FTX.

SEC Chair Gary Gensler previously told CNBC a revived FTX could work if new leadership does so with a clear understanding of the law.

“If Tom or anybody else wanted to be in this field, I would say, ‘Do it within the law,'” Gensler said earlier this month. “Build the trust of investors in what you’re doing and ensure that you’re doing the proper disclosures — and also that you’re not commingling all these functions, trading against your customers. Or using their crypto assets for your own purposes.”

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