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As Bullish’s acquisition of Coindesk poses a potential conflict of interest, some in the industry are raising questions about editorial independence.
CoinDesk has established itself as an independent, often hard-hitting news organization covering the crypto sector.
For context, CoinDesk investigated FTX’s solvency before breaking the news in Q4 2022. Only weeks later, the once popular crypto exchange filed for bankruptcy. Sam Bankman-Fried, the former CEO, was found guilty of all seven criminal charges in late October 2023. The sentence is scheduled for March 2024.
Jason Yanowitz, the founder of crypto news outlet Blockworks, took to X on Nov. 20, saying CoinDesk’s editorial integrity could suffer under new ownership linked to a specific blockchain project.
7/ As someone who competes against CoinDesk, this acquisition is good for us.
— Yano 🟪 (@JasonYanowitz) November 20, 2023
But as someone who loves crypto and believes that, now more than ever, we need unbiased media to move the industry forward in a responsible way, this is not good.
This is a step backwards.
Yanowitz compares this acquisition to Binance buying CoinDesk or BlackRock buying Bloomberg. In either case, the founder thinks it “crushes the editorial integrity of the brand,” even predicting that “every reporter will leave within six months.”
In the founder’s assessment, reporters may consciously or not self-censor when reporting on news relating to the owner’s business or its competitors. Moreover, readers could also lose trust in CoinDesk’s neutrality.
Bullish acquires CoinDesk
Bullish, the crypto exchange backed by EOS creator Block.one, has entered an agreement to acquire leading crypto publication CoinDesk from Digital Currency Group (DCG) on Nov. 20.
The deal, reported to be all in cash, will see one of the crypto industry’s most prominent news sources come under the ownership of an operating company of Block.one. Its reputation is somewhat confusing, as the company is accused of abandoning the development of EOS.
IMPORTANT UPDATE ON THE LAWSUIT AGAINST @B1
— Yves La Rose (@BigBeardSamurai) July 26, 2023
➡️ The ENF is preparing a suit against B1 for failure to follow through on its $1B commitment
➡️ B1 is attempting to settle a separate lawsuit for $22M. You may need to opt out to be eligible to participate in the ENF’s lawsuit pic.twitter.com/uMnUVyRu4M
EOS raised $4 billion in 2018 to develop technology aimed at rivaling Ethereum (ETH) but has faced criticism for centralized governance.
Block.one is reportedly one of the largest holders of Bitcoin, owning more than Microstrategy, the business intelligence firm.
Read more: EOS Foundation suing Block.one for $1 billion commitment breach
DCG’s legal troubles
The deal comes at a precarious economic time for DCG, CoinDesk’s former parent company. DCG founder Barry Silbert has acknowledged emerging companies’ struggles with access to capital following the serious headwinds in 2022.
DCG filed for Chapter 11 bankruptcy protection on Jan. 20, 2023, in the United States Bankruptcy Court for the Southern District of New York. The filing came after the collapse of its subsidiary Genesis Global Capital, which provided cryptocurrency lending and trading services.
While the deal is a liquidity relief for DCG, Yanowitz argues that financial motives do not justify compromising editorial standards vital to journalism.
Read more: DCG announces 23% Q3 revenue jump and Genesis repayments amid legal hurdles