Cryptocurrency news outlet The Block’s CEO has stepped down following revelations of undisclosed loans from disgraced FTX CEO Sam Bankman-Fried’s hedge fund, Alameda Research.
Per a report by Axios, nobody else at the company was aware of these loans, made to LLCs under control by the company’s CEO, Michael McCaffrey.
The LLC’s owned by McCaffrey received three separate loans from Alameda, with the first being used to finance the $12 million April 2021 purchase of The Block under the LLC MJMCCAFFREY.
A second $15 million loan in January of 2022 provided funding for The Block via an LLC named Lonely Road. A third loan of $16 million, according to the report, “went to an LLC named Red Sea that McCaffrey used, in part, to buy [a] Bahamas apartment.”
The Block’s Chief Revenue Officer Bobby Moran will take over as CEO, and the company will seek to restructure in order to buy out McCaffrey’s stake in the company.
The report described how the “news came as a shock to The Block’s editorial leadership, who sources say are livid about McCaffrey’s failure to disclose such a close and critical financial partnership with Bankman-Fried and Alameda…”
Larry Cermak, The Block’s VP of research, stated that “Mike never asked me or anyone in research to cover FTX or SBF in any particular way. Or anyone else, for that matter. We had complete discretion to do our jobs.”
Frank Chaparro, The Block’s news director, released this statement on twitter