CoinDesk Inc, an integrated crypto-focused media outlet is considering a potential part or full sale to support its balance sheet following the liquidity crisis being suffered by its parent company Digital Currency Group (DCG).
According to the Wall Street Journal, DCG has gotten several offers of over $200 million for its purchase for some months now. This represents a 39,900% return on investment after it was initially acquired for about $500,000 to $600,000 in 2016.
To this end, the media outlet has contracted Lazard, a financial advisory firm to help weigh its options which include partial or full sales as it sources funds to help its future growth. However, this development became necessary after a difficult phase for the broader crypto ecosystem that has seen top players go bankrupt and prices of major tokens hit a significant low.
DCG and its Subsidiaries Suffers Liquidity Crisis
According to its website, DCG, a crypto conglomerate has over 160 companies with Grayscale, Genesis, and CoinDesk being the three biggest companies listed in its portfolio, amongst others.
Recall that Genesis, DCG’s trading arm was forced to suspend withdrawals on its platform due to its exposure to the FTX contagion. The trading firm also has an outstanding loan of almost $3 billion, most of which is owned by its parent company.
Grayscale, another DCG-backed firm had its Ethereum (ETH) Trust (ETHE) fund plunged by almost 60% largely due to DCG’s $1.675 million debt to Genesis Global Trading and Winklevoss brothers’ firm Gemini Exchange.
Also, earlier in the year, the venture capital company was forced to shut down one of its wealth management firms named HQ Digital due to its financial crisis and the broader economy.
The financial crisis all of these subsidiaries of DCG have to face speaks to how much of a mess Barry Silbert’s crypto empire is regarding its finances.
Meanwhile, Chinese crypto entrepreneur Justin Sun shared plans to spend about $1 billion in acquiring DCG assets linked to the troubles faced by its subsidiary firm Genesis Global Trading.
