In a surprising turn of events, Binance Capital Management, the registered entity in the British Virgin Islands and the owner of CoinMarketCap, has reportedly contacted leading cryptocurrency news outlet CoinDesk about a possible acquisition. The news was first reported by Blockworks, a cryptocurrency news website.
CoinMarketCap, a Delaware-based crypto data statistics website, was acquired by Binance for $400 million in 2020. At the time, Binance committed to keeping CoinMarketCap independent and separate from its operations, despite previous allegations of bias towards Binance.
According to Blockworks’ sources, Binance Capital Management is using CoinMarketCap as its representative to facilitate the acquisition deal with CoinDesk. CoinDesk has been up for sale since January 2023, after its parent company Digital Currency Group and its lending branch, Genesis, faced financial troubles and bankruptcy. Genesis’ bankruptcy forced Digital Currency Group to consider selling its assets, including CoinDesk.
Interestingly, the crisis that led to the bankruptcy of Genesis and Digital Currency Group was sparked by an investigative report by Alameda Research, which was published by CoinDesk in November 2022. The report led to the collapse of FTX-Alameda in just six days, which then dragged down Genesis and Digital Currency Group. CoinDesk reporters even won a journalism award for the piece, becoming the first crypto newsroom to be recognized by traditional media.
Although Digital Currency Group initially valued CoinDesk at $300 million, it is speculated that the actual sale price may be much lower, possibly around $75 million. In 2016, Digital Currency Group acquired CoinDesk’s ownership rights for just $500,000.
Blockworks’ sources claim that Binance Capital Management has been approaching CoinDesk since February, but initial discussions broke down due to concerns that CoinDesk’s editorial team would leave en masse if Binance acquired the news outlet. As a result, the world’s largest cryptocurrency exchange is now reportedly considering using CoinMarketCap as the buyer’s name for this deal.
When interviewed by Blockworks, CoinDesk CEO Kevin Worth stated that no decision had been made yet regarding the sale of the news outlet and that the company is exploring other ways to raise capital.
Binance has a history of investing in media outlets, having previously invested $200 million in Forbes magazine and $500 million in supporting Elon Musk’s bid to buy Twitter.
CoinDesk isn’t the only cryptocurrency news outlet to be affected by the FTX-Alameda-Genesis crisis. The Block, another popular crypto news website, saw its CEO resign after it was revealed that he had borrowed $43 million from Alameda to expand the company and for personal expenses. The Block had to lay off 27 employees in February 2023 as a result of the financial difficulties caused by the CEO’s actions.
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