The Block CEO Resigns After Ties With FTX Come To Light
The crypto market is struggling to get out of a bearish period mainly caused by the collapse of FTX. Yet, the infamous crypto exchange continues to bring down companies and prominent crypto personalities.
This time, Michael McCaffrey, the CEO of crypto news website The Block, resigned after failing to disclose loans from FTX founder and former CEO Sam Bankman-Fried’s Alameda Research.
As per McCaffrey’s LinkedIn, he joined The Block in 2018 and worked as the staff manager and COO before becoming the CEO.
The Block has declared its former chief revenue officer, Bobby Moran, the new CEO. In addition, the company seeks to hire more team members to expand the publication.
That said, Moran has also addressed concerns regarding the integrity of the news publication:
“No one at The Block had any knowledge of this financial arrangement besides Mike. 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.”
Detail On Loans And Company’s Restructure Plan
According to Moran, McCaffrey discussed sourcing a loan to restructure the company and directly pouring the funds into The Block. The former CEO decided to secure the first loan from Bankman-Fried.
The Block announced the management buyout in April 2021, with the first batch of loans amounting to $12 million. Notably, a second loan amounting to $15 million was used to run everyday operations.
McCaffrey took another loan of $16 million besides the previous two loans. However, this time, the funds were not used to help in boosting operations, but for personal needs.
According to a report, the former CEO used the third loan to buy property in the Bahamas. However, the report further revealed that nobody in the company knew this.
The Block, Pro-SBF And FTX?
Even though Moran has already addressed concerns over the publication’s integrity, some Twitter users think otherwise. One user even went on to write The Block was “super pro-sbf.”
In retrospect do you feel like he influenced the company to be more pro-sbf?
I always felt the block was super pro-sbf in the past, often to my frustration as notafan
Wondering if even if he was the only one who knew you think he subtley influenced coverage to be more favorable
— hayden.eth 🦄 (@haydenzadams) December 9, 2022
Previously, the news director of The Block, Frank Chaparro, interviewed SBF to discuss the aftermath of the crypto exchange on YouTube. Another user wrote on Twitter:
Just in: SBF has been secretly funding the “independent” crypto news channel The Block.
This explains the puff piece they did last week… very disappointing to see.
— Layah Heilpern (@LayahHeilpern) December 9, 2022
Internal Team’s Take On The News
Chaparro claims the former CEO kept the entire team in the dark, and that he felt “misled.”
“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 painful because I’ve put many years into shaping The Block into what it is today. But, I also thought of him as a friend.”
A few days ago, Larry Cermak, The Block vice president of research, gathered a list of Alameda Research’s investments, and it included the loans that the platform took. However, the report did not reveal any financial ties with the platform.
The Block’s financial disclosure page clearly states, “fully transparent about our own financial holdings to avoid any appearance of bias or impropriety”.
One prominent user claims that SBF was directing the editorial. Twitter user @Zhusu supported this statement and posted a series of tweets.
The idea that the CEO of the Block has been bribed massively, that the company has been de facto wholly owned by SBF for years now, yet the underlying reporting was solid, is mindboggling.
SBF was solo source for many of their “scoops.” He ran the entire editorial direction.
— Zhu Su 🔺 (@zhusu) December 10, 2022
Featured image from Pixabay, chart from TradingView.com
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