Struggling crypto exchange FTX secretly funded media firm The Block for more than a year, with money getting sent to the firm’s chief executive Michael McCaffrey, according to a December 9 report by tech publication Axios.
The report claimed that McCaffrey, who stepped aside as the CEO of The Block, get two loans from Alameda Research – Sam Bankman-Fried’s trading platform – of around $27 million to restructure his firm. Another loan of $16 million was issued and used by the CEO to fund his property acquisition in the Bahamas.
The Block’s chief revenue officer, Bobby Moran, said in a statement:
“This news came as both a shock and disappointment to The Block leadership team. Mike’s decision to take out a loan from SBF and not disclose that information demonstrates a serious lack of judgment. It undermines The Block’s reputation and credibility, especially that of our reporters and researchers, as well as our efforts at industry-leading transparency.”
Moran also stated that no one at The Block had any knowledge of that financial arrangement besides Mike. He added:
“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.”
The Block’s editor Frank Chaparro stated that he was devastated by the news of McCaffrey’s secret loans from Bankman-Fried.
He tweeted:
“I’m gutted by this news, which was briefed to the company this afternoon. Underpinning my shock are feelings of utter disgust and betrayal by Mike’s actions, greed, and lack of disclosure. He’s literal scum. He kept every single one of us in the dark.”
1) I'm absolutely gutted by this news, which was briefed to the company this afternoon.
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
— Frank Chaparro (@fintechfrank) December 9, 2022
He also stated:
“Had I known about this, I would have not only called it out and disputed his actions, but called for an immediate change in leadership. Putting aside the FTX meltdown, there is no excuse for his deception and disregard for the 160 people who work at The Block.”
Buy Crypto Now2) I put my trust in him to run The Block as an independent media entity as CEO and majority shareholder — and was misled. This is really painful because I’ve put many years into shaping The Block into what it is today. I also thought of him as a friend.
— Frank Chaparro (@fintechfrank) December 9, 2022
Regulators throughout the world, including in the Bahamas where the FTX exchange is based, and in the US, are investigating the role of FTX’s top executives in the company’s abrupt collapse, Reuters previously reported.
The crypto exchange filed for bankruptcy in November after a liquidity crisis that resulted in the loss of over $1 billion of customer funds.
