key takeaways
- It was revealed today that The Block CEO Michael McCaffrey secretly took out a $43 million loan from Sam Bankman-Fried.
- At least $27 million was used to fund the crypto news company.
- McCaffrey has resigned.
Share this article
Sam Bankman-Fried has provided The Block with at least $27 million in funding in the last year and a half. It appears that no one at the company was aware of the deal, except for CEO Michael McCaffrey.
SBF financed the block
The FTX saga continues to take unexpected turns.
according to a Axios report, crypto news company The Block has benefited from three multi-million dollar loans from former FTX CEO Sam Bankman-Fried over the past year and a half. The loans were made directly to The Block’s CEO, Michael McCaffrey, who appears not to have disclosed them to any other members of the company.
The report indicates that McCaffrey received a first loan of $12 million in April 2021, a second of $15 million in January 2022, and a third of $16 million sometime in the spring of 2022. The first two loans were reportedly used to restructure the company and shore up its balance sheet. Supposedly, at least part of the third loan went to McCaffey to buy property in the Bahamas. McCaffrey himself fixed that the first two loans were used to “strengthen the position of the business” in a Twitter thread. It did not confirm the existence of a third loan.
McCaffrey announced his resignation as CEO and sole board member of the company shortly after the Axios report was published; he was succeeded by former chief revenue officer Bobby Moran. “No one at The Block was aware of this financial arrangement other than Mike,” reclaimed Moran in a public statement. Moran said McCaffrey only disclosed the loans to him just before Nov. 24. Other members of the company found out about the situation this afternoon during a general meeting.
“If I had known about this, I would not have just called him and disputed [McCaffrey’s] actions, but called for an immediate change in leadership. FTX’s collapse aside, there is no excuse for their deceit and disregard for the 160 people who work at The Block.” saying Block’s managing editor, Frank Chaparro. Other members of the company voiced similar feelings.
The terms of the deals between McCaffrey and Bankman-Fried are still unclear. “We have seen no evidence that Mike has ever tried to improperly influence the newsroom or investigative teams, particularly their coverage of SBF, FTX and Alameda Research,” Moran said in his statement.
The Block recently published a two-hour interview between Chaparro and Bankman-Fried. Chaparro was highly praised by the crypto community for his stern and uncompromising attitude towards the disgraced founder of the exchange.
Disclaimer: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.
