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Crypto: The Block CEO showed ‘serious lack of judgment’ in taking loans from FTX’s Sam Bankman-Fried and not disclosing them

The fallout from the implosion of FTX continues, with crypto publication The Block on Friday announcing that Michael McCaffrey has stepped down as its chief executive officer after failing to disclose loans from FTX affiliate Alameda Research. Both FTX and Alameda were founded by Sam Bankman-Fried.

In a note on the blogging platform Medium, The Block’s Bobby Moran wrote that McCaffrey was the only person at the organization with “knowledge of the funding” from Alameda, the crypto hedge fund at the center of the FTX bankruptcy.

No one at The Block had any knowledge of this financial arrangement besides Mike. From our own experience, we have seen no evidence that Mike ever sought to improperly influence the newsroom or research teams, particularly in their coverage of SBF, FTX, and Alameda Research.

Moran, The Block’s chief revenue officer, has take over as CEO, effective immediately, according to a company report.

In a statement, Moran wrote that just before Thanksgiving, McCaffrey revealed that he had obtained some $27 million in loans from Alameda Research to help restructure The Block.

“Those loans … were made by Alameda Research and the funds were used to effect the restructuring and provide working capital directly to The Block,” Moran wrote.

“As many of you know, the restructuring was announced in April of 2021,” he wrote.

The Block, which was founded in 2018, describes itself as a research, analysis and news brand covering digital assets.

Axios reported that McCaffrey led an employee buyout of the publication in 2021.

Early last month, Bankman-Fried’s crypto empire imploded after it came to light that Alameda had used FTX customer money to fund risky bets. 

Before that, Bankman-Fried had been viewed by some as a darling of crypto. He courted lawmakers to bring legitimacy to digital assets, but a run on his firm, along with accusations of gross mismanagement, forced FTX into bankruptcy, sending ripples through many parts of the financial world.

The demise of the firm affected bitcoin prices and, briefly, traditionally assets, including the Dow Jones Industrial Average
DJIA,
-0.90%

and the S&P 500
SPX,
-0.73%
.

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