Changpeng Zhao denies Binance’s acquisition of CoinDesk
On March 14, Blockworks reported that Binance was in talks to acquire CoinDesk through its subsidiary CoinMarketCap. However, within hours, Changpeng Zhao (CZ), co-founder of Binance, denied the acquisition, claiming that it was not “on hold” but that CoinDesk was not fit in their geographic coverage.
The initial talks between CoinDesk and Binance failed due to the exchange’s concern about CoinDesk’s transparency being questioned when Binance acquires it. However, other sources revealed that the negotiations had resumed in the past two weeks, with the focus on using CoinMarketCap as an intermediary for the acquisition.
Not “on hold”. Not buying.
It may be a good business. But not a fit in our geographic coverage. 🙏
— CZ 🔶 Binance (@cz_binance) March 14, 2023
CoinMarketCap is a well-known data provider tool for investors, and Binance Capital Management acquired it in 2020. However, CoinMarketCap claims that there is “no ownership relationship between CoinMarketCap and Binance.com,” and both companies maintain separate policies independently.
According to Blockworks, the exchange considers CoinDesk an important resource but has no intention of buying the news site directly for three main reasons: potential revenue impact, increased regulatory scrutiny, and the need for significant cash over time.
CoinDesk was the first news site to expose Alameda Research’s balance sheet, contributing to FTX’s collapse in just six days. Initial estimates of CoinDesk’s market value ranged up to $300 million, but the actual acquisition price may be significantly lower.
Blockworks revealed that an anonymous company had offered a price of nearly $75 million, while Charles Hoskinson, the founder of Cardano blockchain, was considering buying CoinDesk for about $200 million. Kevin Worth, CEO of CoinDesk, confirmed that the company had received interest from several parties for acquisition. They also signed a contract with the financial advisory firm Lazard to consider different options and attract capital to grow their business. Worth emphasized that no decision to sell CoinDesk has been made yet.
Binance has previously invested $500 million in Twitter to help billionaire Elon Musk acquire the social media platform. In February 2022, the world’s leading exchange poured $200 million into Forbes, supporting the company’s merger with Magnum Opus Acquisition. However, the merger plan was subsequently canceled.
It is understandable why Binance is hesitant about acquiring a media company. In December 2022, The Block’s CEO, Michael McCaffrey, was accused of secretly borrowing $27 million from Sam Bankman-Fried. McCaffrey admitted to receiving money from the founder of FTX and stepped down as CEO. The incident has tarnished The Block’s credibility and raised questions about the site’s objectivity.
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