A media firm Block, which claims to publish crypto news autonomously, has secretly received funding from Sam Bankman-Fried (SBF) throughout the year. The funds were transacted from FTX (the crypto exchange of SBF) to CEO of the Block, as per the reports. At the first, the payments made to the Blocks were not in the knowledge of the news agency’s employees. Earlier, SBF denied all allegations and now it will be interesting to know his response.
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FTX Boss Funded the Block without Disclosure
In this regard, a batch of up to $16 million in funding was taken from Alameda (the sister company of FTX) to finance the buyout of a Bahamas-based flat. As the reports put it, the respective apartment was for Michael McCaffrey (the CEO of Block). McCaffrey has quit his position as the company’s CEO. The news was confirmed by Bobby Moran, the chief revenue officer of the Block.
As McCaffrey is no more playing the role anymore, McCaffrey is to replace him and will additionally consider a restructuring plan for the company. To do this, the new CEO will attempt to purchase the stake of McCaffrey in the firm, as per him. The Block’s sole board member has been McCaffrey since 2021’s April. Moran mentioned that after joining the board of the firm, a couple of additional seats would also be incorporated subsequently.
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The firm was established in 2018 while McCaffrey took the designation of its chief executive officer in 2020. McCaffrey, in April last year, led a purchase of the company’s investors. This turned the firm cumulatively owned by the employees thereof while the majority stake was possessed by McCaffrey. The Unprofitable firm had formerly collected up to $4 million through convertible notes from Bloomberg Beta, BlockTower Capital, and Pantera, Greycroft, according to the reports.
The Block CEO Received 3 Loan from SBF without FTX Consumer’s Permission
In 2022, the revenue of the firm (that has been gathered majorly from subscriptions and ads) is approximately about $20M. Earlier in February 2021, McCaffrey started discussions with SBF regarding a loan for the buyout’s funding, according to the people acquainted with the respective conversations.
McCaffrey’s LLCs got cumulative 3 loan funds from Alameda. The initial one was for $12 million and was used to purchase the Block in 2021 via MJMCCAFFREY LLC. The 2nd was for $15m and it was utilized in January 2022 for the Block through Lonely Road LLC. After that, the 3rd, which was for $16 million, was sent to Red Sea LLC and McCaffrey utilized it partially to purchase the Bahamas-based apartment.
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