Do conflicts of interest exist on the blockchain?
On Monday, cryptocurrency news publication CoinDesk was acquired in an all-cash deal by Bullish, a crypto exchange run by former NYSE president Tom Farley. If you’re a little surprised that a crypto company bought one of the biggest crypto journalism businesses in town, don’t be. Keeping it in the family is the crypto way, just ask the Bankman-Frieds. We’re sure the new owners will be chips off the old blockchain.
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Bullish isn’t even CoinDesk’s first owner with deep structural ties to its coverage subjects, either. Prior to Monday’s sale, the site was owned by a cryptocurrency-focused VC firm called Digital Currency Group (DCG). Meanwhile, crypto news outlet The Block revealed at the end of last year that it had been the beneficiary of $27 million in loans from, you guessed it, Sam Bankman-Fried. Unfortunately for many in the crypto-journalism industry, that meant reporting juicy stories was often akin to drinking from a poison chalice.
It was CoinDesk, after all, that published the first story about the creative company accounting at FTX, which turned out to be the first pebble in the avalanche that shook the branches of the entire crypto-economy — including CoinDesk’s own parent company:
- Genesis, the lending subsidiary of DCG, had funds tied up with FTX and subsequently filed for bankruptcy in January. In September, Genesis hit DCG with a lawsuit in an attempt to claw back $620 million in loans.
- Just a month later both Genesis and DCG were named as defendants alongside Winklevii-owned Gemini in a lawsuit filed by New York City Attorney General Letitia James, who argued that the firms had misled investors to the tune of $1 billion.
CoinDesk announced that in light of its new ownership, it will be establishing a committee to safeguard editorial independence. The committee will be chaired by former editor-in-chief of The Wall Street Journal Matt Murray.
Worth’s Words: The crypto market has experienced a bit of a reprieve lately, something CoinDesk CEO Kevin Worth mentioned in his statement about the company’s acquisition by Bullish. “With renewed momentum in the crypto economy as well as investment from Bullish, we look forward to capitalizing on the many opportunities ahead for product development and expansion,” said Worth. With all that unpleasantness behind it, the crypto market can finally take off in earnest… right?