According to the reports, crypto media organization The Block is selling more than half of its shares. The half that the firm is selling comes to equity worth about $60 million.
A post on X (formerly Twitter) by WuBlockchain says that the media company has talked with several interested investors, according to at least two sources.
The Former CEO Had Undisclosed Loans from Sam Bankman-Fried
The Block has not enjoyed the previous 12 months. On December 9, 2022, then-CEO Mike McCaffrey announced he was leaving the company after failing to disclose loans from from Sam Bankman-Fried.
The financing, provided by Alameda Research, also founded by Bankman-Fried, amounted to $27 million. According to a company statement, the funds were used for a pre-announced restructuring and to provide working capital directly to The Block.
As per Axios, the financing was a subject of discussion between McCaffrey and Bankman-Fried as early as February 2022. Bankman-Fried is now facing trial on multiple counts of fraud and conspiracy.
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In the same Medium post, Bobby Moran, the new CEO, referred to McCaffrey’s “serious lack of judgment” in obtaining the loan without disclosure.
“No one at The Block had any knowledge of this financial arrangement besides Mike,” said Moran. “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 Laid Off 27 Staff Earlier This Year
At the time, Sam Bankman-Fried’s crypto empire FTX, had just recently filed for Chapter 11 bankruptcy. The alleged criminality and misuse of customer funds were beginning to emerge.
Observers were concerned that any financial links may have compromised The Block’s reporting. However, current and former staff say there was never any editorial pressure to cover Sam Bankman-Fried or FTX differently. There is no suggestion it affected the outlet’s coverage.
On February 7, the company announced it would be laying off 27 staff, with resource cuts affecting every department. Those in editorial and research were reportedly the hardest hit.
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