Mike McCaffrey, CEO of crypto publication The Block is resigning effective immediately as a total of $43 million in loans from the now defunct FTX CEO Sam-Bankman Fried that McCaffrey kept secret were revealed by Axios. McCaffrey will be replaced by Bobby Moran, Chief Revenue Officer at The Block.
Moran wrote about the change in a Medium post labelled “CEO Transition” where he revealed that McCaffrey took two loans amounting to $27 million from Bankman Fried to keep The Block afloat. Additionally, SBF also loaned another $16 million to McCaffrey, at least part of which was used to purchase property in the Bahamas, where FTX was headquartered.
The loans, totalling about $43 million weren’t disclosed to anyone at the publication until before Thanksgiving. Taking a loan from SBF and not disclosing it to anyone didn’t sit well with Moran, who thinks the act showed a serious lack of judgement and hurt The Block‘s reputation and credibility.
The Block had previously announced in April that it had bought out all investor shares. It’s now revealed that as much as $12 million of the funding used in the move came from Alameda Research, another company owned by SBF. This money, alongside the rest of the funds paid over nearly the entire next year, was sent by companies owned and controlled by McCaffrey.
The former CEO explained himself in a Twitter thread, claiming that he never attempted to influence the publication’s FTX, Alameda or SBF coverage while also apologising for his “lack of judgement”. That said, his thread only covers the first $27 million in loans from SBF.
The two mentioned loans were $12 million to ‘restructure’ the company taken in February 2021 and another $15 million loan taken in early 2022 to “strengthen the business’s position”. The thread makes no mention of any money taken from SBF to buy property in the Bahamas.
As for The Block, the publication will resume working as usual, but its financial future is in doubt. At the moment, the company is trying to buy out McCaffrey’s ownership.