Barry Silbert sells CoinDesk to former NYSE CEO

Barry Silbert sells CoinDesk to former NYSE CEO

  • Bullish, a digital assets exchange run by former New York Stock Exchange Chairman Tom Farley, has acquired CoinDesk from Digitalency Group.
  • Terms of the purchase have not yet been disclosed.
  • The sale of CoinDesk is the latest sign that Barry Silbert’s cryptocurrency empire is waning.

Barry Silbert, founder and CEO of Cryptocurrency Group

David A. Grosjean | CNBC

After months on the market, cryptocurrency news site CoinDesk has finally been acquired by a company run by the former head of the New York Stock Exchange.

Bullish, a digital assets exchange led by former New York Stock Exchange Chairman Tom Farley, has purchased CoinDesk from Barry Silbert’s cryptocurrency group. It’s the latest sign that Silbert’s cryptocurrency empire, which propelled its founder into the ranks of billionaires, continues to unravel.

CoinDesk will operate as an independent subsidiary of Bullish. Terms of the purchase were not disclosed, but the Wall Street Journal reported it was an all-cash deal.

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

In August, CoinDesk reportedly laid off about 16% of its employees. 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 ever” in a filing Share on XTwitter previously, Monday morning.

Michael Casey, chief content officer at Coindesk, told CNBC that the bullish deal was reached “very quickly,” and that his team in the newsroom is excited about the new strategic alliance.

Thomas Farley

Anjali Sundaram | CNBC

The current management team will remain in place, although an additional layer has been added to ensure journalistic independence. Matt Murray, who was previously editor-in-chief of The Wall Street Journal, will chair a newly formed editorial committee aimed at protecting the newspaper’s independence.

CoinDesk, which launched in 2013, is best known in parts of the cryptocurrency world for exposing the story of potential balance sheet irregularities at Sam Bankman-Fried’s Alameda Research. This report sparked a downward spiral in the FTX cryptocurrency exchange, ending with the collapse of the company and Alameda that month, and the arrest and eventual conviction of Bankman-Fried.

The FTX collapse has infected CoinDesk’s sister company Genesis, a cryptocurrency lender also owned by DCG that filed for bankruptcy protection after suffering huge losses from the collapse of FTX and hedge fund Three Arrows Capital.

Genesis is subject to SEC charges along with cryptocurrency exchange Gemini. Last month, New York Attorney General Letitia James sued DCG and Genesis for defrauding investors of more than $1 billion. Meanwhile, Genesis filed a lawsuit against its parent company, DCG, in September in an attempt 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, known by its ticker GBTC.

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

Grayscale recently won a legal battle with the Securities and Exchange Commission over its application to convert GBTC into a bitcoin spot trading fund. However, if the conversion is eventually approved, there are concerns about profitability, partly due to the company’s commitment to reducing fees.

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

“My focus and the focus of my team at Grayscale is really on scaling up GBTC itself,” he said. “We are not involved in what is happening with DCG, or with Barry, or with any of the other DCG entities themselves.”

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

Bullish is among a shortlist of three bidders vying to buy what remains of bankrupt cryptocurrency exchange FTX.

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

“If Tom or anyone else wanted to be in this business, I would say: Do it within the law,” Gensler said earlier this month. “Build investor confidence in what you’re doing and make sure you’re making the right disclosures — and also that you’re not mixing up all these functions, or trading against your clients. Or using their crypto assets for your own purposes.”

He watches: Cryptocurrencies are in the early stages of a bull market

(tags for translation) Energy

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