Former crypto billionaire Sam Bankman-Fried allegedly funded The Block, an independent crypto news site, through secret loans to the company’s CEO, according to Axios.
The Block staff were unaware of the payments, and CEO Michael McCaffrey resigned from the company Friday in the wake of the Axios report. He will be succeeded by Chief Revenue Officer Bobby Moran, according to a company statement.
“No one at The Block had any knowledge of this financial arrangement besides Mike,” Moran said. “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,” Moran added.
1/2🚨Exclusive: Crypto news site @TheBlock__ has been secretly funded for over a year w money funneled to its CEO LLCs from #SBF’s @AlamedaResearch
—3 loans total:
—$12M & $15M loans went to The Block
—$16M used by CEO to buy real estate in Bahamashttps://t.co/Kr4cRMtS9Q@axios
— Sara Fischer (@sarafischer) December 9, 2022
McCaffrey received three loans through Bankman-Fried’s trading firm Alameda Research, which sent them to LLCs controlled by McCaffrey. He used the first loan of $12 million to buy out The Block’s investors and obtain a majority stake in the company in April 2021, Axios reported.
In Feb. 2022, McCaffrey received a second loan of $15 million from Alameda to provide capital for The Block, according to Axios. He then took a third loan of $16 million to purchase real estate in the Bahamas, where Bankman-Fried’s crypto exchange, FTX, was based.
The Block’s editorial leadership was blindsided by the news due to the site’s continued coverage of the collapse of Bankman-Fried’s crypto fortune, Axios explained. The site will look to restructure to buy out McCaffrey’s majority stake and will be adding members to its board, Moran said.
Bankman-Fried granted an interview to the site’s news director Frank Chaparro on Monday. The following day, the site’s vice president of research tweeted a spreadsheet of Alameda’s investments as reported by the Financial Times, including the loans to McCaffrey’s three LLCs.
“In my time, Mike has never had any undue influence on the newsroom. We’ve always been completely independent,” editor-in-chief Sarah Kopit told Axios. The Block did not list Bankman-Fried’s loans on the financial disclosures page on its website. (RELATED: Weeks Later, No Evidence Media Companies Have Returned A Dime Of Disgraced Crypto CEO’s Funds)
Bankman-Fried’s net worth peaked at $26.5 billion before FTX and Alameda, his crypto trading house, collapsed in November. The exchange filed for bankruptcy on Nov. 11 following mass customer withdrawals in the wake of a report about alleged misuse of customer funds.
The site did not immediately respond to a request for comment.