Leading crypto news site ‘The Block’ received secret funding from Sam Bankman-Fried’s failed hedge fund Alameda Research for the last two years.
According to a statement from The Block, the media company’s now-former-CEO Michael McCaffrey received a total of US$43 million in loans beginning in 2021. This is how the loans were used:
- The first loan was for US$12 million and was received in April 2021. The loan was used to buy out other investors at The Block. This is also when McCaffrey took over as CEO.
- The second loan was for US$15 million and was received in January of this year. It was reportedly used to fund ‘day-to-day operations’ at the media company.
- The third loan was for US$16 million and was received earlier this year sometime between March and May. McCaffrey used this loan to purchase personal real estate in the Bahamas.
McCaffrey stepped down immediately following news of the undisclosed loans being brought to light. He will also step down from his position on The Block’s board.
It’s important to note that no official disclosure was ever made by The Block concerning the financial support it received from Sam Bankman-Fried’s hedge fund Alameda Research.
“No one at The Block had any knowledge of this financial arrangement besides Mike,” The Block’s new CEO Bobby Moran said in a statement.
“From our own experience, we have seen no evidence that Mike ever sought to improperly influence the newsroom or research teams, particularly in their coverage of SBF, FTX and Alameda Research.”Bobby Moran, CEO of The Block
In a Friday Twitter thread, McCaffrey announced his resignation and explained why he took on the loans. According to McCaffrey, The Block was in in serious financial trouble and “the only option that materialized” was to secure a US$12 million loan for his holding company from Sam Bankman-Fried.
McCaffrey added that he didn’t disclose that initial US$12 million loan, nor the following loans to anyone because he didn’t want to raise suspicion about the objectivity of coverage on Sam Bankman-Fried and his now defunct crypto companies; FTX and Alameda Research.
McCaffrey additionally claimed that he “never attempted to influence coverage of FTX, Alameda or SBF.”
The revelation of McCaffrey’s secret financial relationship with Bankman-Fried came as a shock to The Block’s editorial leadership, many of whom have publicly stated they remained in the dark up until the news surfaced on Friday.
Larry Cermak, The Block’s Head of Research addressed the fallout on Twitter saying that he’d “just found out” about McCaffrey’s misconduct.
Frank Chaparro, the Editor in Chief at The Block was equally stunned by the revelation, stating that he was “gutted” by the news.
While some in the crypto community have used McCaffrey’s secret relationship with Bankman-Fried as a reason to throw a shadow of doubt over the editorial standards at The Block, many prominent figures from all sides of the crypto space have rushed in to defend The Block’s journalistic integrity.
Notable crypto sceptic and host of ‘The Crypto Critics’ podcast Bennett Tomlin said that the journalistic integrity of The Block remains intact and publicly defended Chaparro.
The Block’s new CEO Bobby Moran claims that all of the senior leaders at the company are staying with the organization and the website will continue with its usual operations.