A group of investors is in the final stage of negotiations on the purchase of the crypto-oriented publication CoinDesk with a valuation of $125 million, The Wall Street Journal reports, citing informed sources.
The amount of investment is not disclosed.
The syndicate is headed by Matthew Rozak of Tally Capital and Peter Wessenes of Capital 6.
In January, WSJ reported that parent Digital Currency Group (DCG) was considering selling part or 100% of CoinDesk, which became part of the holding company in 2016 after buying it for $500,000-600,000.
The top bid was reportedly $200 million, with the media outlet generating $50 million in revenue in 2022.
The potential deal could alleviate DCG’s tenuous position. On 22 May, the holding company defaulted on a $630m payment in compensation to Gemini Earn users.
Earlier, Digital Currency Group, its subsidiary Genesis, the creditors’ committee of the cryptolending platform and Gemini agreed to launch a 30-day pre-trial conciliation process.
The parties are seeking to find an acceptable solution to Genesis’ proposed February 2023 agreement with creditors, under which the latter could recover 80 per cent of lost funds. The agreement envisaged a gradual zeroing out of Genesis’ loan portfolio and the sale of insolvent structures.
The group’s lending business needed financial support after the bankruptcy of cryptocurrency hedge fund Three Arrows Capital in June 2022.
On 6 November 2022, Genesis Global Capital froze withdrawals and new loans. The firm cited “heightened enquiries” from clients following the FTX collapse.
In January 2023, Genesis Global Holdco and its subsidiaries Genesis Asia Pacific and Genesis Global Capital filed for bankruptcy. According to the media, their liabilities exceed $3 billion.
It should be reminded that on 31 May it became known that DCG’s trading platform with a focus on institutional investors TradeBlock was shut down.
The decision was made four months after the closure of the holding’s subsidiary HQ Digital, specialising in asset management.