Michael McCaffrey, the former CEO of the crypto news publisher The Block, resigned today

According to a statement posted on the company's blog, Michael McCaffrey, the former CEO of the crypto news publisher The Block, resigned today after it was discovered that he had concealed a series of loans he had taken out from Alameda Research, the trading division of Sam Bankman-FTX, Fried's to restructure and fund the publication in early 2021. McCaffrey has also left the company's board of directors.

The three loans, which together totaled $43 million and apparently included a $16 million payout to cover for the outgoing CEO's condominium purchase in the Bahamas, have thrown into question the publication's veracity.

Bobby Moran, the company's chief revenue officer, has been designated the new CEO with immediate effect. According to information provided to Axios, Moran intends to restructure the business in order to acquire McCaffrey's majority ownership interest.

McCaffrey, according to the firm, was the only one who was aware of the loans, and there is "no evidence" that he attempted to sway the site's newsroom or research team in any manner.

The Block was established in 2018, and by April 2021, the journal was owned entirely by its staff. Previously, venture capital organizations like Greycroft, BlockTower Capital, Bloomberg Beta, and Pantera helped the startup raise nearly $4 million. But that buyout was paid for with the first of three $12 million loans provided by the now-infamous Alameda Research. The Block received the second loan of $15 million through an LLC named Lonely Road, and McCaffrey utilized the third loan of $16 million to purchase property in the Bahamas through an LLC called Red Sea.

It is a reputational nightmare for Web3 and The Block that a media outlet in the cryptocurrency field obtained covert money from one of Web3's most tarnished figures (and used a large portion of that funding to buy real estate for personal purposes). It demonstrates that SBF's unethical business practices in the cryptocurrency sector are still having an impact.

The Block leadership team was shocked and disappointed by this announcement, according to the company's statement from the new CEO, Bobby Moran. "Mike's choice to obtain a loan from SBF while concealing that information shows a fundamental lack of judgment. It compromises The Block's credibility and reputation, particularly those of our reporters and researchers, as well as our efforts to provide the highest level of transparency possible.

Moran continues by claiming that no one on the team was aware of McCaffrey's loan agreement and insisting that there is no proof that the money had any impact on the article's coverage. According to Moran, he first became aware of the loans soon before this year's Thanksgiving.

The Block faces challenges in the future. The publication's reputation has suffered greatly as a result of its use of loans provided by the year's top cryptocurrency villain in addition to dealing in off-the-books finances to fund its operations. The future success of the business will depend on Moran's decisions over how to proceed. One thing is certain, though: the harm caused by the greed and lack of transparency that defined the demise of FTX and gave the Web3 community a significant black eye is probably still far from being fully revealed.