On December 9th, the CEO of The Block, Michael McCaffrey, resigned due to his failure to disclose loans he had received from Sam Bankman-Fried’s bankrupt Alameda Research. McCaffrey had allegedly obtained loans from the troubled crypto empire without informing anyone.
McCaffrey had gotten loans from the disgraced crypto empire without informing anyone, according to a Dec. 9 press statement.
The Block’s CEO Got Over $40 Million Loan
The statement revealed that McCaffrey obtained $27 million in loans from SBF. The loans came in two batches of $12 and $15 million and were paid into LLCs that the former controlled. He used the funds to restructure The Block and buy out all the early investors.
The Block stated that there was no sign that its former CEO influenced reporting or research at the company.
“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.”
Information obtained by Axios suggests McCaffrey had received a third loan worth $16 million from Alameda, which he used to purchase a luxurious apartment in the Bahamas. This information has raised further questions about the CEO’s financial dealings and his decision to resign from the company.
Bobby Moran, the Chief Revenue Officer for the media company, will be taking over as the new CEO. McCaffrey, the former CEO, will be resigning from the company’s board of directors, where he was the sole member. Despite his departure from the board, McCaffrey will still maintain his majority ownership of the company as its majority shareholder.
Meanwhile, Moran would expand the board seat to three members.
Employees Reveal Shock
The crypto media company employees have expressed shock at the revelation. The VP of Research, Larry Cermak, said he lost almost all his The Block bonuses and compensation for four years to The FTX collapse.
The Block’s Frank Chapparo said he was “absolutely gutted” by the news. He added that he felt “utter disgust and betrayal” by the former CEO’s actions. Chapparo said the firm should be “an employee-owned company and give McCaffrey’s equity to journalists.”
Some crypto community members questioned how no one knew about the funding except the former CEO.
However, others praised the outlet for the quality of its coverage, citing the recent podcast interview SBF granted to The Block.
Meanwhile, Cermak clarified that McCaffreywas previously the only person on the outlet’s board which allowed him to act alone.
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