FTX's controversial creator, Sam Bankman-Fried, has discreetly funded The Block, an independent bitcoin news platform, for over a year by wiring money to its CEO.
After receiving $43 million in loans from SBF's Alameda Research, the CEO of a bitcoin news website quit.
From SBF's Alameda Research totaling $43 million.
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.
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'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:
Mike was the only person at The Block who was aware of this financial arrangement. Our own observations show that Mike has never attempted to unfairly sway 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.
Insiders claim that The Block's editorial leadership is incensed that McCaffrey failed to disclose such a large financial arrangement with Bankman-Fried and Alameda, especially given that they are still covering the impacts of FTX's bankruptcy. The editorial leadership was shocked by the news.
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.
Read Also: Elon Musk claims SBF spent over $1 billion on Dem Elections.
