Things are going from bad to worse for Digital Currency Group (DCG). According to reports, it may be forced to sell its crypto publication CoinDesk.
On January 18, CNBC reported that CoinDesk had incorporated investment bank Lazard. The outlet owned by Digital Currency Group is considering a full or partial sale of the business.
In an emailed statement, CEO Kevin Worth said, “Over the past few months, we have received several inbound indications of interest in CoinDesk.”
The outlet was launched in 2013 and broke the first story about problems with FTX and its questionable balance sheet. Furthermore, according to the WSJ, DCG acquired the media company in 2016 for $500,000.
The eventual collapse of the Sam Bankman-Fried crypto empire has caused no end of problems for Barry Silbert’s Digital Currency Group. The firm is also the parent company of digital asset manager Grayscale.
Dark clouds for DCG
Financial advisory and asset management firm Lazard Media will help the company “explore various options to attract growth capital to the CoinDesk business, which could include a partial or complete sale.”
DCG’s problems escalated after the FTX failure. Its crypto lending firm, Genesis, is on the verge of bankruptcy as it recovers from exposure to toxic loans. This has affected crypto exchange Gemini, which had $900 million in customer funds locked with its yield partner Genesis.
In a letter to shareholders earlier this month, CEO Barry Silbert said DCG owed $447.5 million and 4,550 BTC to Genesis Capital. The loan matures in May 2023.
DCG also holds shares in Grayscale’s Bitcoin Trust (GBTC). The firm has reportedly bought GBTC worth $722 million since March 2021. The trust is currently selling at a discount of -40% to the net asset value.
On 18 January, DCG sent a letter to shareholders stating that it was pausing the quarterly dividend to conserve funds. Besides, the group earlier this month closed its asset management business and laid off employees.
crypto market crash
Crypto markets are in decline today with total market capitalization down by 3.9%. This has again brought the figure below $1 trillion.
As a result, all the majors are in red mark at the time of writing. Bitcoin fell 2.5% on the day to $20,710. Meanwhile, Ethereum is down 3.8% over the past 24 hours, trading at $1,519 at the time of writing.
disclaimer
BeInCrypto has reached out to the company or individual involved in the story for an official statement regarding the recent developments, but has not yet received a response.