1 year ago
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CoinDesk Considers Selling Business
Crypto asset (virtual currency) conglomerate company Digital Currency Group (DCG) affiliated media CoinDesk is exploring the possibility of selling its business. The Wall Street Journal and others reported.
CoinDesk is seeking advice from investment bank Lazard, which specializes in mergers, restructuring and capital strategies, to consider selling the business.
CoinDesk CEO Kevin Worth said:
Over the past few months, there have been moves showing interest in acquiring CoinDesk. For this reason, I hired Lazard as my financial advisor.
The goal is to explore various options for attracting growth capital to the CoinDesk business, including partial or full divestitures.
What is DCG
A major cryptocurrency conglomerate. It has 6 subsidiaries and invests in over 200 blockchain-related startups and over 50 cryptocurrency funds and projects. Major subsidiaries include investment company Grayscale, bitcoin mining company Foundry, Genesis Global Capital, and cryptocurrency media CoinDesk.
Cryptocurrency Glossary
In 2016, DCG acquired CoinDesk for about ¥64 million (about $500,000). The current valuation has not been disclosed, but according to people involved, the company will generate about 6.4 billion yen ($50 million) in revenue in 2022 from online advertising, the provision of cryptocurrency indices, and the event business. .
CoinDesk’s parent company, DCG, is currently experiencing liquidity problems. On the 17th, it was revealed that the company had notified it to suspend dividends on stocks.
DCG’s valuation reached about 1.3 trillion yen in early 2022 when it raised funds, and annual revenue at that time reached 130 billion yen. And my finances got worse.
Relation: DCG, a major virtual currency with liquidity problems, explains points about the impact on the market
Subsidiary Genesis to file for bankruptcy
DCG has taken over approximately 141 billion yen ($1.1 billion) of debt incurred by subsidiary Genesis due to the bankruptcy of 3 Arrows Capital (3AC). In addition, Genesis is detained about 22.5 billion yen ($175 million) deposited with FTX, which went bankrupt in November 2022.
As for Genesis, it owes more than ¥385 billion ($3 billion) in debt and is reportedly filing for bankruptcy at Chapter Eleven as early as this week.
Genesis has suspended the withdrawal of user funds, and the virtual currency exchange Gemini, which provided yield services through Genesis, has also suspended user fund redemption related to this yield program.
Relation: Cryptocurrency lending company Genesis, whether to file for bankruptcy this week = report
Chapter 11 of the U.S. Bankruptcy Code (Chapter 11)
A reconstruction-type bankruptcy legal system similar to the Civil Rehabilitation Law of Japan. The company will be restructured by reducing debts while continuing to operate. Debt collection will be suspended after the application, and the debtor will work on debt consolidation and formulate a reconstruction plan within 120 days in principle.
Cryptocurrency Glossary
Problems with grayscale
DCG-owned Grayscale is also having trouble with its Bitcoin (BTC) mutual fund GBTC. With the US Securities and Exchange Commission (SEC) rejecting the conversion of GBTC into an ETF, users are unable to arbitrage for premiums and discounts to the spot price of Bitcoin.
Currently, GBTC continues to be discounted (negative divergence) from the spot Bitcoin price, and conversion to an ETF was expected to improve this situation.
Grayscale has filed a lawsuit against the SEC, alleging that its refusal to convert to an ETF was arbitrary. DCG is the largest holder of GBTC, and research firm Arcane pointed out that the market could be affected if DCG sells some of its GBTC holdings for cash flow reasons.
Relation: Grayscale Responds to SEC in Lawsuit Over Bitcoin ETF Conversion
The post DCG’s CoinDesk considers possible sale of business appeared first on Our Bitcoin News.
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