News in a Glimpse:
- The Block has been secretly funded by Sam Bankman-Fried, whose predecessor loaned $27 million in undisclosed loans to Michael McCaffrey, the head of the aforementioned cryptocurrency news website.
- The Block’s CEO Michael McCaffery has already resigned from his position due to his failure to disclose loans he had received from Sam Bankman-insolvent Fried’s Alameda Research.
- The news-focused staff at the cryptocurrency media company are visibly shocked by this revelation.
The Secret Funding
Sam Bankman-Fried, the former CEO of the now-defunct cryptocurrency exchange platform FTX, has been funding The Block in secret. According to reports, the former CEO loaned Michael McCaffrey, the CEO of the aforementioned cryptocurrency news website, $27 million in a series of undisclosed loans.
The article claims that McCaffery received a $16 million loan from Bankman-Fried, which enabled him to buy property in the Bahamas, where FTX is based. After “failing to disclose a series of loans from disgraced former FTX head Sam Bankman-Alameda Fried’s Research,” The Block recently confirmed that McCaffrey had already resigned from its position.
The Block also noted in the same statement that McCaffrey was the only employee in their organization with knowledge of the relevant funding. Bobby Moran, who is currently The Block’s chief revenue officer, will take over as CEO with immediate effect.
The new CEO of The Block clarified in a Medium post that Alameda Research was responsible for the loans, which total $27 million. According to reports, the aforementioned money was used to carry out the restructuring and give The Block immediate access to working capital.
He added that the leadership team of The Block was shocked and disappointed by this news. He continued by saying that McCaffrey’s choice to obtain a loan from SBF and withhold that information reveals a serious lack of judgment. They have asked McCaffrey to resign as a result of his behavior, and as a result, he will no longer be responsible for The Block’s daily management or operations.
On the other hand, Bankman-Fried, who is currently charged with defrauding the government of billions of dollars, asserts that he is not ready to give testimony at a US Congress committee hearing on December 13.
The FTX collapse, which caused the loss of billions of dollars in investor capital, is currently being investigated by the US House Financial Services Committee. According to reports, the company’s former CEO transferred $10 billion in client funds from FTX to his trading firm Alameda Research in secret.
CEO Leaves His Position
In light of his failure to disclose loans he had received from Sam Bankman-insolvent Fried’s Alameda Research, The Block’s CEO Michael McCaffery has already resigned from the position. Where the new CEO of The Block clarified that the previous CEO is accused of secretly obtaining loans from the troubled cryptocurrency empire.
According to The Block’s statement, the former CEO received $27 million in loans from FTX’s former CEO, who is now the platform’s now-defunct CEO. The aforementioned loans, totaling $12 and $15 million, were made in two separate payments to LLCs under the former’s control. The aforementioned funds were used to buy out all of the early investors and restructure The Block.
The Block went on to say that McCaffrey shows no signs of having an impact on the company’s reporting or research division. In which he claimed that, based on their own observations, neither the newsroom nor the research teams had been improperly influenced by McCaffrey, particularly when it came to their coverage of SBF, FTX, and Alameda Research.
McCaffrey also received a third loan from Alameda worth $16 million, which he used to buy a lavish apartment for himself in the Bahamas. The CEO’s financial dealings and decision to leave the company have come under scrutiny in light of this additional information.
Bobby Moran will take over as CEO of the company from McCaffrey, who has already resigned from that position. McCaffrey, who is the company’s largest shareholder, will continue to hold a majority stake in it. Moran, on the other hand, would increase the number of board members to three.
Employees’ Reaction
The news-focused employees of the crypto media company express their shock at this revelation without holding back. Larry Cermak, the vice president of research at The Block, highlighted how much he had lost by claiming that the FTX collapse had cost him nearly all of his The Block bonuses and compensation for four years.
While The Block’s Frank Chapparo claims that the news left him “absolutely gutted,” he also stated that the former CEO’s actions left him feeling “utter disgust and betrayal.” The business should be “employee-owned and give McCaffrey’s equity to journalists,” he continued.
However, some members of the cryptocurrency community questioned and still doubt the assertion that no one other than the former CEO was aware of the funding. While others have praised the news source for the caliber of its reporting, pointing to the most recent podcast interview SBF gave to The Block.
