Soon after a report stated that the CEO of The Block received funding from Sam Bankman-Fried, the news website confirmed the allegations. According to The Block, the outlet’s chief executive officer McCaffrey stepped down and was replaced by the CRO on Friday, December 9th.

Michael McCaffrey Received $43 Million From Sam Bankman-Fried

As confirmed by The Block, the website’s now-former CEO Michael McCaffey received $43 million from FTX’s disgraced founder. The money came in three rounds and the last round—worth $16 million—was used to purchase property in the Bahamas. Reportedly, McCaffey failed to disclose the funding, and the outlet’s staff is also in shock.

Writing on Twitter, Mike Dudas called the revelation “the worst personal betrayal” of his life. In the wake of the report, the Block chose its chief revenue officer Bobby Moran as the new CEO. According to the website, the change in leadership is effective immediately, and the new chief executive officer immediately issued a statement on the matter:

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.

However, the initial round of funding—worth $12 million—was reportedly secured shortly before The Block’s now-former CEO led a buyout of the website under an LLC named MJMCCAFFREY LLC. Furthermore, despite being removed from the board, McCaffrey remains the outlet’s majority shareholder.

McCaffrey justified taking the money from SBF by stating that The Block was “in a precarious place” in early 2021. He went on to explain that accepting the funding was the only way to restructure the company as he was considering either a merger or a sale of the website. McCaffrey also went on record confirming he didn’t disclose the funding to anyone on the site as he didn’t want it “to compromise the objectivity of their coverage”.

FTX Contagion So Far

As recent weeks have proven, the effects of FTX’s bankruptcy will be both far-reaching and varied. The most obvious of these can already be seen in a number of digital asset companies that either suspended withdrawals like Genesis, or have been forced to file for bankruptcy as in the case of BlockFi.

As the extent of Sam Bankman-Fried’s donations came to light, public confidence in various news outlets also became eroded. The discussion surrounding the possibility that FTX’s former CEO bought various kinds of influence first started after the New York Times published an interview that many judged to be too soft. 

More recently, it was reported that Semafor, another outlet that received “sizeable funding” from SBF, was forced to issue reassurances that its coverage wasn’t influenced by the money. Sam Bankman-Fried’s political donations also became a hotly debated topic. Furthermore, his Washington spending spree prompted even more doubts on whether the SEC is really doing enough to protect investors.

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