Sam Bankman-Fried, former CEO of failed crypto exchange FTX, loaned $27 million to crypto publishing CEO Michael McCaffrey The block, to help it stay afloat, according to a Medium post from the site’s Chief Revenue Officer, Bobby Moran. Bankman-Fried also loaned McCaffery $16 million, part of which helped him buy real estate in the Bahamas, where FTX is headquartered, according to Axioswho broke the story.
McCaffrey is stepping down today and will be replaced by Moran. Moran writes that McCaffrey kept the funding a secret from everyone else in the company until he revealed it before Thanksgiving this year.
Bankman-Fried is no stranger to funding journalistic endeavors, with a number of well-known and public investments. He invested in Traffic lights, ProPublic, The interceptionas well as a reporting project from Vox, a site of The edgethe parent company, Vox Media.
And having financing from the industry is not unusual in itself, although it can put outlets in awkward positions, as we noted on CoinDesk‘s report that its owner financially undermined DCG.
According to Moran, taking a loan from SBF and not disclosing it showed a serious lack of judgment and “undermines The Block’s reputation and credibility, especially that of our reporters and investigators, as well as our industry-leading transparency efforts.”
In April last year The block announced that it had bought out investors’ interests, making itself “the only employee-owned company in crypto research, news and information services”. It has now been revealed that $12 million of the money used for the move came from Alameda Research, Bankman-Fried’s investment firm. That money, along with the rest of the money paid over the next year or so, was sent through LLCs owned and controlled by McCafferty, according to Moran.
The block will continue to work, although the financial future may be stormy. The company wants to buy out McCaffrey’s property and will of course no longer receive money from FTX or Bankman-Fried (the former is currently going through bankruptcy proceedings). The second $15 million loan, made in January 2022, went toward paying for the site’s operations.
In a tweet thread on friday, McCaffrey said he “never tried to influence coverage of FTX, Alameda or SBF” and apologized for his “lack of judgment”. His thread does not address the loan that allegedly went to the Bahamas property.