According to sources familiar with the matter, Binance Capital Management (BCM) plans to acquire CoinDesk, a leading cryptocurrency news company and a core component of the Digital Currency Group (DCG) empire.
Binance is after crypto news company CoinDesk!
BCM, registered in the British Virgin Islands, is seeking ways to acquire the company through its subsidiary CoinMarketCap, a Delaware company, according to sources. These talks are said to be currently on hold. CoinDesk CEO Kevin Worth confirmed the sale issue in a statement regarding the sale in January. But it became widely known that DCG’s parent company acquired CoinDesk after suffering pains with Genesis and its lending arm, which sought bankruptcy protection earlier this year.
Worth told CNBC in January that he had received “a lot of inbound requests” for Coindesk. He also noted that the company has contracted with Lazard, a financial advisory firm, to “explore various options to attract capital into the CoinDesk business.” According to another source, who suggested the value of the potential deal would be around $75 million, the actual purchase price is expected to be significantly lower, although initial estimates of CoinDesk’s market cap are up to $300 million.
Binance: Everything for the cryptocurrency industry!
Barry Silbert’s DCG acquired the company for approximately $500,000 in 2016, nearly three years after its launch. It has become a leader in crypto news and events. Accordingly, two of its journalists, Ian Allison and Tracy Wang, recently received a prestigious George Polk Award for their financial reporting. CoinDesk’s story revealing weaknesses in FTX’s financial position on the Alameda balance sheet has been widely regarded as the first domino in the collapse of the Sam Bankman-Fried empire.
Last month, a source said that initial talks between CoinDesk and Binance broke down as he expected a mass journalist exit from the news company if the exchange became a majority owner. A different source revealed that Binance was considering buying through a blind trust, but over the past two weeks, talks have given up on that idea. However, they said the talks have been revived by Binance Capital Management with a focus on the use of CoinMarketCap as a buyout tool.
According to a source, Binance sees CoinDesk as an ‘important force for good’ in the cryptocurrency industry. But they noted that an investment in the company would be driven by fears that other investors wouldn’t take steps to save the news outlet. They suggested that the acquisition of CoinDesk by Binance would have a ‘fairly low’ probability of completion due to three factors: This could be a drop in revenue, may require significant oversight and more cash injections over time.
Binance is expanding in the market, where is it headed?
BCM acquired CoinMarketCap, the world’s most visited crypto data aggregation website, with nearly 100 million visits per month, according to UniqueWeb, in April 2020. CoinMarketCap claims that ‘There is no ownership relationship between CoinMarketCap and Binance.com’ on its website, and that ‘CoinMarketCap and Binance are separate entities that maintain a strict policy of independence from each other’.
A source at a Binance subsidiary said earlier this year that the exchange was interested in buying media properties, but was cautious that their neutrality could be questioned as a result of the exchange’s potential ownership. This was confirmed by a second source who suggested that crypto-native posts do not constitute obvious targets.
As you follow on Kriptokoin.com, Binance has invested in Twitter before, but the $200 million investment proposed to Forbes did not continue when SPAC was cancelled. As the bear market continues, the crypto media landscape continues to evolve rapidly. The Block recently laid off 27 of its employees following the disclosure of a $27 million confidential loan given by Sam Bankman-Fried to former CEO Mike McCaffrey, who resigned after going public.
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