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0 CommentsCrypto media site The Block was secretly funded over the last two years by Sam Bankman-Fried’s Alameda Research. CEO Michael McCaffrey has resigned as a result of the news coming to light, The Block confirmed on Dec. 9.
Michael McCaffrey, The Block’s CEO, immediately resigned after the loans from Alameda Research came to light and will also leave The Block’s board. The company claimed no one at The Block had any knowledge of the loans except for McCaffrey. Bobby Moran, The Block’s chief revenue officer, will become the new CEO.
As per The Block, McCaffrey received three loans for a total of $43 million in 2021-22. The first loan was for $12 million in 2021 to buy out other investors in the media company, at which time McCaffrey took over as CEO. The second was for $15 million in January to fund day-to-day operations, and the third was for $16 million earlier this year for McCaffrey to purchase personal real estate in the Bahamas.
“No one at The Block had any knowledge of this financial arrangement besides Mike,” the new CEO said in a statement. “From our own experience, we have seen no evidence that Mike ever sought to improperly influence the newsroom or research teams, particularly in their coverage of SBF, FTX, and Alameda Research.”
SBF, or Sam Bankman-Fried, is the founder and CEO of FTX, a crypto exchange that collapsed last month after CoinDesk revealed an unusually close relationship between FTX and affiliated trading firm Alameda Research.
On Dec.9, McCaffrey said on Twitter that in early 2021, the company was in dire straits, and “the only option that materialized” was to secure a $12 million loan for his holding company from Bankman-Fried. McCaffrey also said he didn’t disclose that loan, nor a subsequent $15 million loan, to anyone since he didn’t want knowledge of the loan to be seen as compromising the objectivity of the coverage of SBF and his companies. He also added that he “never attempted to influence coverage of FTX, Alameda, or SBF.”
The Block’s editor-at-large Frank Chaparro said on Twitter that he was “gutted by this news, which was briefed to the company this afternoon,” adding that McCaffrey “kept every single one of us in the dark.”
Meanwhile, another online cryptocurrency news site CoinDesk has attracted potential buyers to take over the media outlet from Digital Currency Group amid market turmoil, Semafor reported last week, citing sources familiar with the matter. Semafor, which launched in October with investments including from FTX founder Sam Bankman-Fried, reported that one potential buyer offered a $300 million purchase price.
