Alameda Research secretly invested in The Block

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Updated December 12, 2022 | Published December 12, 2022

2 mins read

The Block’s employees were shocked to discover that secret payments were made to former CEO Michael McCaffrey.

Sam Bankman-Fried’s FTX cryptocurrency exchange may have curried favors with the media, sponsoring a news website covering the industry, according to a report by Axios.

According to the outlet, The Block, a publication, has received funding from FTX’s former boss. This allegedly continued for more than a year.

Specifically, the money was directed from Alameda Research, the troubled company that is largely seen as the chief culprit behind FTX’s collapse and its disgraced boss. The Block employees were not aware of the backchannel that existed with Alameda Research.

Payments were directed to the Block’s now former CEO Michael McCaffrey who stepped down last week.

McCaffrey allegedly received at least $16m on one occasion from Alameda Research to finance the purchase of an apartment in the Bahamas.

McCaffrey was largely seen as a positive force in The Block, making employees the full owners of the publication.

The Block itself was not profitable, but it was able to drive investor interest, and it’s presently expected to generate $20m in the full year of 2022. According to Axios, McCaffrey received three loans from Alameda through LLCs he controlled.

He then went on to use part of the money, some $12m, to buy out The Block and give control to employees.

The second one of roughly $15m was transferred to MJMCCAFFREY LLC. The third one, as noted by Axios, was used by McCaffrey to partly fund his purchase of the apartment.

The Block's chief revenue officer Bobby Moran who will now take over as CEO has confirmed that all of these transactions did indeed take place. Moran was infuriated to discover that McAffrey had acted the way he had, he told Axios.

“My immediate reaction was anger, frustration and concern for all my colleagues”, Moran explained.

Staff were also notified about the transactions and the back feed between FTX and The Block’s now former CEO.

While The Block had done their reporting in good faith, they also fell for Bankman-Fried’s shtick which presented him as a savior of the cryptocurrency industry.

Looking for your next crypto casino? Check out: Bitcasino, Gamb.co or FortuneJack.

Written by Alex

Reporter

Alex is a well-rounded crypto writer who focuses on general market and legal developments. His main interest lies in how crypto gaming can become a more permanent part of the gaming landscape and how blockchain holds benefits to players they are not even aware of.
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