CoinDesk to lay off 45% of editorial staff amid restructuring, report says

Digital Currency Group’s traditional cryptocurrency publication is downsizing amid rumors of a restructuring and new investors, The Block reports.

Cryptocurrency publication CoinDesk will lay off 45 percent of its editorial staff in a sweeping reorganization as parent company Digital Currency Group (DCG) seeks to bring in strategic investors, according to an internal memo reviewed by The Block.

The layoffs, announced internally on Monday, will eliminate 20 staff, or 45% of the editorial team. Overall, this represents a 16% reduction in the company's headcount. CoinDesk Chief Executive Officer Kevin Worth described the decision as "a necessary step to ensure a financially sound business moving forward," suggesting the move was aimed at finalizing the sale of CoinDesk Inc.

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Founded in 2013, CoinDesk has become a leading name in the cryptocurrency media space.

The layoffs follow news of a nearly $125 million deal led by Tally Capital cryptocurrency investor Matthew Roszak, in which DCG will retain a stake. DCG acquired CoinDesk in 2016 for $500,000 and expanded its offerings to include events, data, and indexes.

DCG's restructuring plan comes at a critical time for the company, which has been under scrutiny from regulators and facing significant financial challenges. DCG subsidiary Genesis Capital filed for Chapter 11 bankruptcy protection in January with liabilities ranging from $1.2 billion to $11 billion.

In addition to a possible sale of CoinDesk, DCG is also seeking new investors for its cryptocurrency exchange Luno. Meanwhile, the New York Attorney General's Office is reportedly investigating DCG's dealings with another subsidiary, Genesis Global Capital, which also includes former chief risk officer Michael Patchen.

These legal pressures add to the challenges facing DCG, but the parent company has expressed confidence in its future. According to the DCG Q2 investor letter, CoinDesk had a strong quarter, taking in $15 million from the Consensus 2023 festival in April. The letter also outlines the company's ongoing efforts to attract new institutional and strategic investors.

The layoffs have stunned the cryptocurrency community, with those laid off awaiting details from an all-hands meeting scheduled for Monday at 4:00 p.m. ET.

While CoinDesk is undergoing this major shift, competition within the crypto media space continues to heat up. CoinDesk's reputation as a reliable news source and industry influencer could prove to be an important asset as it seeks to realign its business strategy.

The story is part of an ongoing wave of restructuring and realignment in the cryptocurrency industry as regulatory pressure mounts and investors seek opportunities for greater stability. Against this backdrop, CoinDesk's restructuring could be a sign of further change in the industry as businesses adapt to a rapidly evolving environment.