The FTX debacle keeps taking unexpected turns. A bombshell report has revealed that Sam Bankman-Fried’s Alameda Research secretly provided The Block and its ex-CEO, Michael McCaffrey, with at least $43 million in funding over the past year and a half.
Bobby Moran, The Block’s chief revenue officer, has announced he will be assuming the position of Chief Executive Officer following the resignation of McCaffrey.
SBF Generously Funded The Block
According to a report from Axios, cryptocurrency media site The Block profited from three multi-million dollar loans from the disgraced founder of collapsed crypto exchange FTX, Sam Bankman-Fried. The funding was directed to The Block’s CEO Michael McCaffrey, who apparently failed to disclose the loans to the media company’s leadership team.
The report indicates that McCaffrey received the first loan of $12 million from Alameda Research in April 2021 to buy out non-employee shareholders of the firm. The second was for $15 million in January 2022 to finance day-to-day operations. Interestingly, McCaffrey’s third loan of $16 million earlier this year was used to purchase personal property in the Bahamas.
McCaffrey said in a series of tweets on Friday that The Block was in financial jeopardy in early 2021 and the “only option” that emerged was to restructure when he obtained a loan from SBF for one of his limited liability companies. As for why he didn’t disclose this loan or the subsequent $15 million to any other company members, McCaffrey explained that he didn’t want knowledge of the loan to compromise the objectivity of their coverage of SBF and his companies. He further noted that he “never attempted to influence coverage of FTX, Alameda, or SBF.
McCaffrey announced his resignation as the firm’s CEO shortly after news of the loans came out. His successor, Bobby Moran, posited:
“No one at The Block had any knowledge of this financial arrangement besides Mike,” said Moran. “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.”
Moran says he was made aware of the situation just before November 24, while the rest of the researchers and journalists at The Block were informed about the loans today during a staff meeting.
“Had I known about this, I would have not only called it out and disputed his actions but called for an immediate change in leadership. Putting aside the FTX meltdown, there is no excuse for his deception and disregard for the 160 people who work at The Block,” posited The Block’s editor-at-large Frank Chaparro.
Investigations Into FTX Collapse Mount
After billions of dollars of clients’ money on the FTX exchange went up in smoke in an abrupt collapse, many media houses have reported on a drumbeat of grisly financial discoveries, including huge donations made by Sam Bankman-Fried to U.S. politicians in a bid to curry favours.
The U.S. Department of Justice, the SEC, and the CTFC are all looking into the exchange’s implosion — but no criminal charges have been brought forward, and a court has yet to decide if SBF was indeed a fraudster like Binance CEO Changpeng “CZ” Zhao and others say. The former wonder boy has agreed to testify at a Dec. 13 meeting of the House Financial Services Committee.