By George Ward
The crypto market has been struggling since the start of 2022. The market is fighting to recover from a bearish season fueled by the recent FTX collapse.
The crypto firm’s bankruptcy issue has affected several investment firms and crypto entities. Companies like Sequoia Capital and others have written off their crypto investments as zero.
This time, the FTX bankruptcy contagion has crept into a new media company. According to reports, the CEO of The Block, a crypto news platform, Michael McCaffrey, has resigned.
The Block CEO Resigns After Failure To Disclose SBF Loan
McCaffrey resigned from the crypto news website this week. The CEO failed to reveal that he obtained loans from FTX’s sister company, Alameda Research.
According to the ex-CEO’s LinkedIn profile, he joined the platform in 2018. At the time, he worked as the COO and staff manager before he became the CEO.
Meanwhile, the previous Chief Revenue Officer, Bobby Moran, has emerged as the company’s new CEO. Additionally, the crypto news site wants to expand its reach by recruiting more team members.
As stated by Moran, McCaffrey talked about getting a loan for the company’s restructuring. But, the former CEO obtained the first loan from SBF.
In April 2021, The Block revealed some loan acquisition deals, with the first round of loans totaling $12 million. Interestingly, they obtained another loan of $15 million to fund day-to-day operations.
In addition to the past ones, McCaffrey obtained another $16 million loan. However, the monies were not used to help enhance operations but for personal purposes.
According to media reports, the former CEO used the loan to purchase real estate in the Bahamas. Meanwhile, the company’s audit indicated that no one was aware of this.
Moran Addresses Issues Concerning The Block’s Integrity
Meanwhile, the current CEO of The Block, Moran, has shared the company’s opinion about the loan. He said, “No one at the company knew about this loan apart from Mike.”
“However, we have no evidence suggesting that Mike influenced the company’s research team while covering news on Alameda Research, FTX, and SBF,” he added.
Although Moran addressed fears concerning The Block’s integrity, some individuals have a different view. A Twitter user even accused the website of being “ultra-pro-SBF.”
One of them is Frank Chaparro, The Block’s news director, who interviewed Sam Bankman-Fried on YouTube in the past.
According to Chaparro, the past CEO of The Block had the news from the entire team. In his words, “as CEO and main shareholder, I believed in him to manage The Block as an independent media business. I feel misled.”
Then, he added, “this is difficult for me since I’ve spent many years building the news platform into what it is now. I considered him as a friend.”
A few days back, the VP of research at The Block, Larry Cermak, listed all the investments of Alameda Research. However, the list also contained the loan the trading platform gave out.
However, the list did not reveal any financial history between The Block and Alameda Research. Meanwhile, the company’s financial disclosure page notes that it is fully transparent about its financial holdings to prevent a form of impropriety or bias. Unfortunately, recent events state otherwise.