It was found that The Block, a media company which is supposed to be “your reliable source for the latest news and research on digital assets”, was secretly funded by SBF, former FTX CEO, who is now facing the trial.
According to Axios, Sam Bankman-Fried made three loans of $43 million in total to the Block CEO Michael McCaffrey. The investigation says that this money was used to buy out The Block via an LLC named MJMCCAFFREY LLC in 2021 and to pay for McCaffrey’s apartment in the Bahamas. According to McCaffrey he used the funds to restructure the company and strengthen the position of the business.
McCaffrey resigned shortly after and will step down from the company’s board as well. At the same time he’s still the company’s majority shareholder.
1/ I have difficult news to share. I’m stepping down as The Block’s CEO. While it’s personally painful, it’s the right thing for The Block and the team.
— Mike McCaffrey (@McCaffrMike) December 9, 2022
The Block's chief revenue officer Bobby Moran took over. According to Moran, McCaffrey first told him about the transactions back in November.
“My immediate reaction was anger, frustration and concern for all my colleagues. Everyone has worked incredibly hard over the years — since before I joined and since I've been here — to be fair, accurate and independent in their coverage and thought this would call that into question. And that's frustrating,” - said the new CEO.
According to The Block and McCaffrey, he was the only person with knowledge of the funding at the company. Other company employees say that they were never asked to write something “special” about Alameda or FTX and claim to be shocked, overwhelmed and disgusted:
1) I'm absolutely gutted by this news, which was briefed to the company this afternoon.
— Frank Chaparro (@fintechfrank) December 9, 2022
Underpinning my shock are feelings of utter disgust and betrayal by Mike’s actions, greed, lack of disclosure. He's literal scum. He kept every single one of us in the dark. https://t.co/jIZCxtHrfc
This is another story that has topped the pile of recent crypto-related scandals. Misleading and unreliable information as well as secret undercover deals are among the main reasons for the current chaos in the industry. Transparency is crucial, especially when it comes to blockchain and crypto which are supposed to be transparent by their nature.
We cannot judge others but we promise you to continue to observe independently.
