Cryptocurrency information services company, The Block, is under a scanner. The trails of its secret funding from Sam Bankman-Fried’s (SBF) Alameda Research have been reportedly unearthed. In total, 3 loans have been reportedly received by The Block and its CEO.
Two loans from Alameda channeled to The Block amount to $12M and $15M, respectively. The third Alameda loan, totaling to $16M, was received by The Block’s CEO Michael McCaffrey, reportedly used to buy real estate in the Bahamas.
McCaffrey has officially resigned as The Block’s CEO, and is also set to relinquish the board position, per sources.
Breaking the news, Sara Fischer, Media Reporter, Axios, tweeted:
1/2🚨Exclusive: Crypto news site @TheBlock__ has been secretly funded for over a year w money funneled to its CEO LLCs from #SBF’s @AlamedaResearch— Sara Fischer (@sarafischer) December 9, 2022
—3 loans total:
—$12M & $15M loans went to The Block
—$16M used by CEO to buy real estate in Bahamashttps://t.co/Kr4cRMtS9Q@axios
Bobby Moran, chief revenue officer, The Block, will replace McCaffrey as CEO. Moran will also buy out the ex-CEO’s stake in The Block, as well.
Moran says he will now preside over The Block’s board. Two more seats would be added to the board as The Block braces for a restructure.
The Block, though, has always refrained from disclosing any direct connections to SBF or Alameda Research. In February 2021, SBF and McCaffrey commenced discussing a loan disbursement for buyout financing, sources reveal.
Expressing his dismay on being informed way too late about the SBF-Alameda exposure of The Block’s finances, Moran said,
My immediate reaction was anger, frustration and concern for all my colleagues. 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.
Sarah Kopit, editor-in-chief, The Block, maintains,
I’m proud of the work our journalists have done, especially covering the fallout from the FTX implosion.
McCaffrey’s three LLCs are reported to have acted as recipients of the loans from SBF’s Alameda Research.
The $12 million Alameda loan ended-up financing the said buyout in April 2021 via MJMCCAFFREY LLC.
The $15 million loan from Alameda in January 2022 offered The Block capital via Lonely Road LLC.
The $16 million loan disbursed in spring 2022 went to Red Sea LLC, assisting McCaffrey in buying an apartment in the Bahamas, per Moran.
But any disclosure by The Block of the financial support from SBF’s Alameda Research is missing.