Sam Bankman-Fried, the controversial founder of FTX, has been secretly funding The Block, an independent media outlet that covers cryptocurrency news, for more than a year by sending money to The Block's CEO. The payouts, which The Block employees were previously unaware of, might damage the image of the cryptocurrency news outlet and cast doubt on its coverage of SBF, the now-defunct FTX, and its trading firm, Alameda Research.
SBF Hands CEO $43 Million
According to The Block, Michael McCaffrey, the former CEO of the cryptocurrency news website, acquired three loans totaling $43 million from SBF between 2021 and this year. In order to buy out other investors in the media company, the first loan was made in 2021 for $12 million, and McCaffrey subsequently took over as CEO.
The third was for $16 million earlier this year for McCaffrey to purchase exclusive real estate in the Bahamas, while the second was for $15 million in January to cover ongoing expenses.
The Block CEO's Resignation
The Block's CEO, Michael McCaffrey, has resigned from his position in response to this exposé. With immediate effect, Bobby Moran will take over as editor in chief of the news website. He states in his formal statement:
"No one at The Block had any knowledge of this financial arrangement besides Mike. From our own experience, we have seen no evidence that Mike ever sought to improperly influence the newsroom or research teams."
According to The Block, McCaffrey will step down from both his roles as CEO and chairman of the board of the business, which will now have three members. Two more persons are being sought by the company to join Moran's larger team.
The Block: What is it?
The Block was founded in 2018, and McCaffrey assumed control as CEO in the following year. In April 2021, McCaffrey orchestrated a buyout of the company's investors, turning The Block into a 100% employee-owned business with him holding the majority of the stock.
Previously, venture capital firms like Greycroft, Pantera, BlockTower Capital, and Bloomberg Beta issued convertible notes to the company, which is not profitable, to fund close to $4 million.
