The crypto news site’s CEO has resigned after failing to disclose $43 million in loans from disgraced FTX founder Sam Bankman-Fried — part of which was used to buy an apartment in the Bahamas.
Michael McCaffrey stepped down as CEO of The Block last week. As reported by Axios. Issued a report by the constituency Confirming the statement.
Block received three loans from Alameda Research, the hedge fund founded by Bankman-Fried, blamed for FTX’s implosion.
The first loan, $12 million, was extended to The Block last year. McCaffrey used that money to buy out other investors and make the company wholly owned by its employees. Soon after, McCaffrey, who held a majority stake, took over as CEO, according to Axios.
In January, The Block took out another loan — this one for $15 million — that was used to fund the cashless platform’s day-to-day operations, Axios reported.
A third loan, for $16 million, was disbursed in the spring and McCaffrey used it to buy real estate in the Bahamas, Axios reported.
“Other than Mike, no one at The Block knew anything about this financial arrangement,” Bobby Moran, The Block’s chief revenue officer, said in a statement.
Last month, FTX filed for Chapter 11 bankruptcy after the company used billions of dollars worth of client funds to cover losses from Alameda Research. FTX spent $300 million to buy real estate in the Bahamas.
Journalists at The Block, founded in 2018, were stunned when informed of the loans.
“My immediate reaction was anger, frustration and concern for all my colleagues,” Moran told Axios.
“Everybody has worked incredibly hard over the years — before I joined and since I’ve been here — to be fair, accurate and independent in their coverage, and I thought this was called into question.”
FTX’s collapse and the role of Bankman-Fried and others have come under scrutiny from federal prosecutors and regulators.
Bankman-Fried is plotted Testify remotely before Congress on Tuesday.
Bankman-Fried’s ties to The Block are further questioned Role of news media in failure To catch the despicable knee that was the benefactor Mostly positive coverage From major outlets, to account.
“From our own experience, we have seen no evidence that Mike attempted to improperly influence the newsroom or research teams, particularly in the coverage of SBF, FTX and Alameda Research,” Moran said.
Brian Armstrong, CEO of FTX competitor Coinbase, It hit the mainstream media last week Bankman-Fried has gone on an apology tour that has included interviews with The New York Times, Bloomberg, ABC’s “Good Morning America” and other outlets for being so soft on Fried.
Armstrong called out Rep. Maxine Waters (D-Calif.) for tweeting that the House Financial Services Committee “should welcome” Bankman-Fried’s “participation” in a hearing on FTX’s downfall the following week.
“It’s very strange to see the whole thing, I feel like the mainstream media primarily gave a lot of softball interviews, and even this tweet with Maxine Waters very politely asking her to come to trial. She politely deferred, which is odd,” Armstrong said during an interview. Technology Newsletter Stratechery Published on Thursday.
“I mean, this guy swindled $10 billion, why is he being treated with kid gloves?” Armstrong added. “For example, compare his tweets about Mark Zuckerberg, who never stole $10 billion from people, and what do you think of the guy.”
Additional reporting by Thomas Barraby