The folks at CoinDesk were just too good at their job. The crypto news site was the first to poke holes in Sam Bankman-Fried’s crypto sandcastle that was FTX, but now the company that owns the crypto news site is reportedly exploring a sell-off in part due to the fallout of the failed and allegedly fraudulent venture of Bankman-Fried.
The the wall street journal announced for the first time late Wednesday 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 had 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, CoinDesk’s Ian Allison first reported based on internal documents that Alameda Research, which was Bankman-Fried’s hedge fund, relied heavily on the native FTT token of the FTX exchange. It 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 federal trial more than eight charges of fraud and conspiracy.
These events have created another crisis for the crypto industry at large, including at DCG. It has also impacted sites that cover tech and crypto. CoinDesk leadership told The New York Times that their journalists cover DCG like any other crypto entity. Other sites such as the young information media Semafor spoke sell the investments that 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 the trust fell 51% over the past year, and its assets have grown from over $40 billion in 2021 to around 13.1 billion, according to Grayscale’s own metrics.
The group also owns crypto lender Genesis, which had to stop buyouts and lending citing the collapse of FTX. 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 beginning of 2023, the lender cut 30% of its staff in the second round 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 why. It’s a shame that the people responsible for showing how the entire crypto industry was – and continues to be – now have their jobs in jeopardy.