Crypto Media The Block Was Funded With FTX Money, CEO Resigns
- The CEO of crypto media site The Block, Michael McCaffrey, has resigned and Chief Revenue Officer Bobby Moran has been appointed to the role.
- McCaffrey had taken loans from crypto exchange FTX’s sister firm Alameda Research which total to $27 million in two rounds.
- A third loan of $16 million was taken in spring of 2022 that went to LLC named Red Sea that McCaffrey used to buy apartment in The Bahamas.
- The employees and newroom was informed about McCaffrey’s involvement with FTX earlier this week and Moran was told just before Thanksgiving.
At one time, the reach of this former multi-billion-dollar crypto exchange and now bankrupt firm was unmatched, even for its rivals like Binance and Coinbase. There was a heavy cash flow at the exchange as per multiple reports, and interestingly, this cash was used for various purposes, including the funding of the crypto media website, The Block, which also rose in popularity during the 2020–22 period.
According to a report from Axios, The Block stated that it had independent coverage but, it was being secretly funded by FTX and there was no knowledge of this for almost a year until now. The Block had financial dealings with the exchange’s founder and former CEO, Sam Bankman-Fried (“SBF”), also known as the crypto industry’s “white knight,” at one point of time.
As per the report from Axios, which cited sources with the knowledge of the matter, the employees of The Block were unaware of the funding of the media website up until when the report was made public. This “could undermine the news company’s credibility and cast doubt on its coverage of Bankman-Fried, the now-bankrupt FTX and Alameda Research, Bankman-Fried’s trading firm,” stated the report.
More shockingly, a $16 million batch of funding from the sister company of FTX, Alameda Research, was used to finance the purchase of an apartment in the Bahamas for Block CEO Michael McCaffrey, confirmed the report which cited sources closer to the transactions. Moreover, The Block’s chief revenue officer, Bobby Moran, will now be stepping into that role.
In a statement, Moran stated that McCaffrey was looking to merge, sell, or restructure his firm during the beginning of 2021. He chose the third option of restructuring and eventually, took loans from Alameda Research which currently amount to over $27 million.
“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 stated.
The Block executive added that from his own experience, he has never seen McCaffrey “ever sought to improperly influence the newsroom or research teams, particularly in their coverage of SBF, FTX, and Alameda Research.”
Moran joined The Block in 2021 as Chief Revenue Officer and prior to this, he was the Chief Revenue Officer at POLITICO and the online educational service at EverFi.
Furthermore, according to some source, the current revenue of The Block from advertisements and subscriptions amount to over $20 million. As per Moran, McCaffrey first told him about the transactions just before Thanksgiving.
“My immediate reaction was anger, frustration and concern for all my colleagues,” Moran said. “Everyone has worked incredibly hard over the years — since before I joined and since I’ve been here — to be fair, accurate and independent in their coverage and thought this would call that into question. And that’s frustrating.”