Barry Silbert sells CoinDesk to former NYSE president

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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 run by the former president of the New York Stock Exchange.

Bullish, a digital asset exchange led by former NYSE chief Tom Farley, has bought CoinDesk from Barry Silbert’s Digital Currency Group. This is the latest sign that Silbert’s crypto empire, which took its founder into the billionaire ranks, is still crumbling.

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

DCG, which was first acquired by 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 at a possible sale in January, seeking support from advisers at Lazard. In July, however, 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 would “immediately inject capital” into the media company to scale up the operation.

Silbert called CoinDesk one of DCG’s “best investments ever,” in a post on Xformerly known as Twitter, on 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, although an additional layer has been added to ensure journalistic independence. Matt Murray, formerly editor-in-chief of The Wall Street Journal, will lead a new editorial committee designed to protect the publication’s autonomy.

CoinDesk, launched in 2013, is best known in parts of the crypto world for breaking the story of possible improprieties on the balance sheet at Alameda Research Sam Bankman-Fried. That statement triggered a downward spiral at crypto exchange FTX, ending with the collapse of the company and Alameda that month, and the eventual arrest and conviction of Bankman-Fried.

The contagion from the liquidation of FTX hit CoinDesk’s sister company Genesis, a crypto 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 a Securities and Exchange Commission charge along with crypto exchange Gemini. Last month, New York Attorney General Letitia James filed a lawsuit against DCG and Genesis for allegedly defrauding investors of more than $1 billion. Meanwhile, Genesis sued 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, better known by its ticket holder. GBTC.

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

Grayscale recently won a legal battle with the SEC over its bid to turn GBTC into a venue bitcoin exchange-traded fund. If the conversion is ultimately approved, however, there are concerns about profitability, in part because the company has promised to cut taxes.

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

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

While Silbert’s influence is waning, Farley’s influence continues to grow.

Bullish is among a short list of three bidders trying to buy what’s left of the bankrupt crypto exchange.

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

“If Tom or anyone else wanted to be in this area, 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 using all these functions, trading against your customers. Or using the crypto assets for your own purposes. “

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