Recent revelations have shown that the popular media platform, The Block, involved in independent coverage of crypto news, has been secretly bankrolled for over a year with funds obtained from Sam Bankman-Fried’s cryptocurrency trading company, Alameda.
The announcement was made in a statement released by Bobby Moran, The Block’s Chief Revenue Officer. According to the report, Sam Bankman-Fried (also known as SBF), the disgraced founder of the bankrupt cryptocurrency company FTX and its trading arm Alameda Research, had secretly funneled a series of loans to The Block’s Chief Executive Officer Michael McCaffery.
McCaffery received a total of three loans. The first loan given in 2021, which was in the sum of $12 million, was used to buy out other investors in the crypto news, data, and research provider. He later took over the daily running of the company at the time as its CEO. The second loan of $15 million, released in January 2022, was used to fund The Block’s daily operations, while the third and final loan of $16 million was used to finance the acquisition of private real estate in the Bahamas for the CEO.
Following the announcement, McCaffery resigned from his position as CEO and left the company. The Block’s chief revenue officer Bobby Moran was later confirmed as the firm’s new CEO. While McCaffery still retains a majority stake in the company’s stocks, Moran will look to restructure the company to buy out McCaffery’s stake in the company. Moran will also join The Block’s board, which is set to add two more people.
The Block is a crypto news platform founded in 2018, with McCaffery as its first CEO. In April 2021, McCaffery supervised a buyout of The Block’s investors, allowing the firm to be 100% owned by employees, with McCaffery having the majority stake. The company had previously raised over $4 million through convertible notes from venture firms, such as Pantera, Bloomberg Beta, BlockTower Capital, and Greycroft. Its revenue, mostly gotten from ads and subscriptions, is expected to be around $20 million this year.
These payments, which most of The Block’s employees were previously unaware of, could negatively impact the news site’s credibility and cast doubt on the platform’s coverage of Bankman-Fried. The Block’s editorial team was particularly livid about McCaffery’s failure to disclose such a critical financial partnership with Bankman-Fried and Alameda, especially as they continue to cover the fallouts that follow FTXs collapse.
According to The Block’s VP of research Larry Cermak, the past CEO, never requested anyone in research to cover SBF or FTX in any particular way, noting they all maintained absolute discretion on how to perform their jobs. Similar sentiments were also voiced by The Block’s editor-in-chief Sarah Kopit, who stated that McCaffery never exerted any undue influence on members of the newsroom.
McCaffery’s resignation follows a string of recent industry casualties connected to the infamous collapse of Bankman-Fried’s crypto empire. Going forward, Moran stated that every senior leader would remain in the company as it continues to operate and publish new works.
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