CoinDesk is expected to be sold for $125 million, bringing hope to DCG's debt.

According to WSJ's report, an investor group is in the final stages of a deal with cryptocurrency media company CoinDesk. CoinDesk is expected to be sold for $125 million, bringing a ray of hope to DCG Group's financial difficulties.

$125 Million Deal Announced, Management to Remain Unchanged

According to sources cited by the WSJ, the buyers are led by Matthew Roszak of Tally Capital, a private investment firm focused on cryptocurrencies and blockchain technology, and Peter Vessenes of Capital6, a venture capital firm and family office.

The deal is valued at approximately $125 million. As part of the transaction, DCG, the parent company of CoinDesk, is expected to retain a stake in the media, events, data, and index business. The transaction is expected to be completed in the coming weeks, with the current management team of CoinDesk expected to remain unchanged.

Sale Expected to Shed Light on DCG's Debt Situation

CoinDesk is currently owned by the cryptocurrency group DCG Digital Currency Group, which acquired the company in 2016 for $500,000. Last year, DCG's lending arm Genesis faced bankruptcy pressure, and in January of this year, there were reports that DCG was looking to sell CoinDesk for $200 million. At that time, Charles Hoskinson, co-founder of Cardano, expressed interest in acquiring CoinDesk and transforming it into a hybrid of news and community site.

In early February, DCG reached a preliminary agreement with Genesis creditors to convert $1.1 billion in 2032 maturing bonds into convertible preferred shares issued by DCG. DCG also planned to issue new senior secured notes to refinance its existing 2023 notes, extending the maturity date to June 2024, with a total value of around $600 million. However, as the end of July approaches, there have been no reports of DCG repaying its debts.

Legal Battle with Gemini Unfolds

DCG has become embroiled in a legal battle with Gemini, a major creditor and cryptocurrency exchange founded by the Winklevoss brothers. Gemini accuses DCG of concealing significant losses suffered by Genesis in the spring of 2022 after one of its major borrowers, the cryptocurrency hedge fund Three Arrows Capital, defaulted. In early July, Gemini formally sued Genesis' parent company DCG and founder Barry Silbert for alleged fraud.

Recently, various asset management companies, including BlackRock, have applied for a bitcoin spot ETF, indirectly boosting the premium reduction of Grayscale funds under DCG, leading to a significant price increase. If CoinDesk's sale goes through, could it bring substantial progress to DCG's debt situation?