Sources speaking to Axios, cryptocurrency He said that the media company The Block, which claims to have independently published its news, has been secretly funded for over a year and that money has been transferred from Sam Bankman-Fried’s crypto trading company to The Block CEO.
These payments, previously unknown to The Block’s employees, could undermine the credibility of the news company and cast doubt on reports of Bankman-Fried, the bankrupt FTX, and Bankman-Fried’s trading firm Alameda Research.
The Block CEO Bought a Flat in the Bahamas with Money From Sam Bankman-Fried
According to sources familiar with the transactions, $16 million in funding from Alameda was used in part to fund Block CEO Michael McCaffrey’s purchase of a flat in the Bahamas.
Bobby Moran, head of revenue at The Block, confirmed to Axios on Friday that McCaffrey is stepping down as CEO and leaving the company. McCaffrey is also leaving the board.
Moran said McCaffrey would take over as CEO and would seek to restructure The Block to buy McCaffrey’s stake in the company.
McCaffrey has been the company’s sole board member since April 2021. Moran said he will join The Block’s board of directors and add two more seats. The Block was founded in 2018 and McCaffrey became CEO in 2020.
A source told Axios that the company’s revenue is expected to be around $20 million this year, mostly from advertising and subscriptions.
According to two sources familiar with the talks, McCaffrey began discussions with Bankman-Fried in early February last year about a loan to finance the acquisition.
Limited companies controlled by McCaffrey received a total of three loans from Alameda, some of which can be converted into equity in the company.
McCaffrey used an initial $12 million loan in April 2021 to finance the acquisition of Block through an LLC called MJMCCAFFREY LLC.
The latter provided capital for Block through an LLC called Lonely Road for $15 million in January 2022.
The third went to an LLC called Red Sea, which McCaffrey partially used to purchase the Bahamas flat, for $16 million in the spring of 2022. Moran confirmed that these transactions took place.
The news came as a shock to The Block’s editorial board; Sources say McCaffrey hasn’t disclosed such a close and critical financial partnership with Bankman-Fried and Alameda, especially as he continues to address the consequences of FTX’s collapse.
Frank Chaparro, the site’s news director, interviewed Bankman-Fried on Monday for the company’s podcast.
*Not investment advice.
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