April 18, 2024

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The Block CEO resigns after reports of undisclosed loans from Alameda Research

Michael McCaffrey, the chief executive officer of cryptocurrency news outlet The Block, resigned after media website Axios reported early Saturday, Hong Kong time, that he had received three undisclosed multi-million dollar loans from Alameda Research, the brokerage arm of failed digital assets exchange FTX.com.

See related article: Disgraced FTX founder SBF to speak at New York Times Dealbook Summit despite controversy

Fast facts

  • The company’s chief revenue officer, Bobby Moran, will lead the company following McCaffrey’s departure, according to a statement released Saturday.
  • Moran said that no one outside of McCaffery knew of the three loans totaling US$43 million from February 2021.
  • McCaffrey’s limited liability company, MJMCCAFFREY LLC, took the first loan of US$12 million from Alameda in 2021 to buy out investors. He chose not to disclose the loan in fear of compromising the news outlet’s objectivity in covering FTX, he claimed in a Twitter thread shortly after the revelation, confirming Axios’ report.
  • The second loan, worth US$15 million, helped fund day-to-day operations, while a US$16 million third loan was used to buy personal property in the Bahamas, where FTX is based, McCaffrey said.
  • McCaffrey has also stepped down as the company’s sole board member, which is expanding to three people.
  • The Block hopes to buy out McCaffrey’s majority stake in the company as part of its restructuring.
  • Since FTX filed for Chapter 11 bankruptcy in November,  its collapse has led to market contagion spreading in the cryptocurrency industry.

See related article: SBF’s parents, FTX executives bought Bahamas property worth US$121 million: Reuters