In a move that is sending shockwaves throughout the editorial and journalistic communities, FTX is now accused of secretly funding the lavish lifestyle of The Block CEO Michael McCaffrey. If true, this is a scandal for the ages!
As if things could not get worse for FTX and its founder Sam Bankman-Fried, the 30-year-old is now accused of sending secret payments to the crypto online publication, The Block.
The report said McCaffrey, who stepped down as the CEO of The Block, received two loans from Alameda Research of about $27 million to restructure his company. Another loan of $16 million was used by the CEO to fund his property purchase in the Bahamas.
Executive Team Both Shocked & Disappointed
“This news came as both a shock and disappointment to The Block leadership team. Mike’s decision to take out a loan from SBF and not disclose that information demonstrates a serious lack of judgment. It undermines The Block’s reputation and credibility,” Bobby Moran, Chief Revenue Officer.
According to Fischer, The Block’s CEO received three loans from SBF, totaling $43 million from 2021 to this year. The first loan worth $12M was part of SBF’s efforts to buy out investors in the crypto media company in April 2021. In January 2022, SBF provided another loan worth $15 million to fund The Block’s daily operations. Thirdly, SBF also loaned The Block’s CEO a whopping $16 million earlier this year to enable him to acquire private real estate.
CEO Claims His Intentions Were Good
McCaffrey added that he didn’t disclose that initial US$12 million loan, nor the following loans to anyone because he didn’t want to raise suspicion about the objectivity of coverage on Sam Bankman-Fried and his now-defunct crypto companies, FTX and Alameda Research.
McCaffrey additionally claimed that he “never attempted to influence coverage of FTX, Alameda, or SBF.”
The revelation of McCaffrey’s secret financial relationship with BankmanFried came as a shock to The Block’s editorial leadership, many of whom have publicly stated they remained in the dark up until the news surfaced on Friday.
Reactions From The Crypto Industry
The report has prompted a series of reactions from members of the crypto industry. Many have started doubting the credibility of The Block’s FTX, SBF, and Alameda Research coverage.
Cardano founder Charles Hoskinson is among the top crypto players who commented on SBF’s secret loan to The Block. Hoskinson took to Twitter to remind ADA enthusiasts about the recent negative coverage Cardano has gotten.
While some in the crypto community have used McCaffrey’s secret relationship with Bankman-Fried as a reason to throw a shadow of doubt over the editorial standards at The Block, many prominent figures from all sides of the crypto space have rushed in to defend The Block’s journalistic integrity.
Notable crypto skeptic and host of ‘The Crypto Critics’ podcast Bennett Tomlin said that the journalistic integrity of The Block remains intact and publicly defended Chaparro.
“I don’t know what this tweet is supposed to convey, but Frank has done excellent work and has always been kind and friendly to me. There are many people who disagree with me on many things for many reasons, and many of them are right.”
What to Make of This Scandal
Is this a sign that all things in crypto are corrupt and not to be trusted? Of course not; this only signifies that bad actors took advantage of a system designed to be used for good and democracy.
In a time of need, The Block did what they needed to do in order to stay afloat, and unfortunately, their CEO took advantage of this overly generous offer from Sam Bankman-Fried. And now, because of it, McCaffrey should be the one to suffer the consequences, not the publication or all of the hard-working journalists who dedicated their blood, sweat, and tears to this industry.
The lesson here is that of restraint, humility, and transparency. We must be able to trust one another in order for crypto to continue to prosper.