CoinDesk to be acquired, the former owner’s encrypted background revealed

CoinDesk's Acquisition Unveils Former Owner's Encrypted History

Source: Protos; Compilation: Song Xue, LianGuai

According to The Wall Street Journal, an investment group is about to reach a deal to acquire CoinDesk. This transaction will value one of the most prolific cryptocurrency news companies at $125 million.

Matthew Roszak from Tally Capital and Peter Vessenes from Capital6 are the leaders of the investment group selling assets to parent company Digital Currency Group (DCG), but the identities of other members are still unknown.

Roszak and Vessenes have a long and convoluted history in the cryptocurrency ecosystem, dating back to Mt. Gox.

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Let’s start with Vessenes. He was the CEO of Coinlab, and in fact, Mt. Gox was CoinLab’s broker and partner. A series of lawsuits and disputes erupted between Mt. Gox and CoinLab, arguing over which terms of the agreement were violated, until Gox’s bankruptcy. During the bankruptcy proceedings, CoinLab made a series of escalating claims, eventually declaring that Gox owed them $1.6 billion. In reality, CoinLab was Mt. Gox’s broker and partner, help attract investments from North Americans like Roger Ver, Barry Silbert, and Tim Draper.

A series of lawsuits were initiated between Mt. Gox and CoinLab, arguing over which terms of the agreement were violated – until Gox went bankrupt. CoinLab made a series of escalating claims during the bankruptcy proceedings, ultimately declaring that Gox owed them $1.6 billion.

During the Gox bankruptcy, Vessenes clashed with Roszak. Roszak, along with Brock Pierce, William Quigley, Jonathan Yantis, Louis Freeh, and John Betts, formed a company called Sunlot Holdings with the hope of acquiring Mt. Gox and reviving it.

Pierce even described Vessenes’ lawsuits as “frivolous.”

“He claimed that if [the partnership with Mt. Gox] hadn’t been canceled, CoinLab would have become Coinbase and was suing for all the value,” said Pierce, who believed Coinbase was worth $16 billion, so he expected $1.6 billion in compensation.

“He misappropriated Mt. Gox’s money, committed a crime, and tried to extort the creditors. He dragged the whole process on, hoping to get money.”

It is worth noting that Pierce still wanted to revive Gox, and the lawsuits delayed the bankruptcy proceedings.

Brock Pierce, William Quigley, and Jonathan Yantis later discovered a famous stablecoin called RealCoin, commonly known as Tether. Tether ended the banking business of Noble Bank founded by Pierce and John Betts. They also received a memorandum from Louis Freeh of Freeh, Sporkin, & Sullivan, proving its reserves.

When Pierce was chairman, Peter and Brock also worked together at the Bitcoin Foundation for a while. Eventually, he was forced out.

Roszak and Pierce continued to collaborate elsewhere, including Bitcoin Decentral, a short-lived incubator based in Toronto advised by Stuart Hoegner. He also served as the general counsel for Tether and Bitfinex.

More importantly, Matthew Roszak and Andrew “Flip” Filipowski co-operate Tally Capital and Silk Road Equity. Flip also runs Blue Rhino, which eventually led Roszak to settle with the SEC over insider trading charges in the Blue Rhino merger.

All of this makes me want to say: these people are not good custodians of CoinDesk.

CoinDesk has done incredibly prestigious and groundbreaking journalism, often putting the team at odds with their parent company DCG – led by Barry Silbert, who continues to do some things with DCG, Grayscale, and Genesis.

CoinDesk is also willing to undertake years-long legal efforts to improve transparency in Tether.

I don’t believe the new owners will support challenging the industry’s news business. One person is trying to sue a bankrupt cryptocurrency exchange for $15 billion; another is an accused insider trader who can’t stop collaborating with Pierce.

DCG seems less interested in continuing to let CoinDesk operate.

Perhaps the alternative is worse. Frankly, I just hope the custodians of CoinDesk don’t get any worse; I hope many talented journalists and researchers can continue to strengthen this industry freely.

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