Barry Silbert sells CoinDesk to former NYSE chairman

After months on the market, crypto news site CoinDesk was finally bought by a company led by the former chairman of the New York Stock Exchange.

Bullish, a digital assets exchange led by former NYSE chief Tom Farley, purchased CoinDesk from Barry Silbert’s Digital Currency Group. It’s the latest sign that Silbert’s crypto empire, which propelled its founder to the ranks of billionaires, continues to collapse.

CoinDesk will operate 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 transaction.

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 began exploring a possible sale in January, using advisors from Lazard. However, in July, a $125 million purchase deal by a consortium of investors fell through.

In August, CoinDesk reportedly laid off approximately 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 ever,” in a post onformerly 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 about the new strategic alliance.

The existing management team will remain in place, although an additional layer has been added to ensure journalistic independence. Matt Murray, who previously served as editor-in-chief of The Wall Street Journal, will lead a newly formed editorial board intended to protect the publication’s autonomy.

CoinDesk, launched in 2013, is best known in parts of the crypto universe for breaking the story of potential irregularities in the balance sheet of Sam Bankman-Fried’s Alameda Research. This information sparked a downward spiral in the crypto exchange FTX, ending with the collapse of the company and Alameda that month, as well as the arrest and eventual conviction of Bankman-Fried.

Contagion from FTX’s collapse has hit CoinDesk’s sister company Genesis, a crypto lender also owned by DCG that filed for bankruptcy protection after suffering crippling losses from the collapse of FTX and the 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 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 ticker GBTC.

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

Grayscale recently won a legal battle with the SEC over its application to convert GBTC into a Bitcoin spot exchange-traded fund. However, if the conversion was ultimately approved, concerns would remain about profitability, in part because the company has committed to cutting costs.

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

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

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

Bullish is part of a short list of three bidders vying to buy what’s left of bankrupt crypto exchange FTX.

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

“If Tom or anyone else wanted to work in this field, I would say, ‘Do it within the law,'” Gensler said earlier this month. “Build investor trust in what you do and make sure that you are disclosing appropriate information – and also that you are not mixing all these functions, trading against your clients. Or using their crypto assets for your own purposes. “

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