Sam Bankman-Fried, the disgraced founder of bankrupt crypto firm FTX and its trading arm Alameda Research, secretly invested in a crypto news site, Axios reported Friday.
Axios said the news site, The Block, has been funded by payments from Alameda to the site’s now-former CEO, Michael McCaffrey. Employees were previously unaware of the investment, Axios reported, but the revelation could raise conflict-of-interest concerns. The site had never disclosed the connections, Axios reported.
Bankman-Fried did not immediately respond to a request for comment from Insider. The Block’s editor-in-chief Sarah Kopit declined to comment when contacted by Insider.
Meanwhile, The Block’s revenue chief, Bobby Moran, said in a statement on Friday that McCaffrey had resigned from the company and that Moran had stepped into the role of CEO.
“Just before Thanksgiving, Mike told me that in early 2021 he was evaluating ways to merge, sell or restructure The Block,” Moran wrote in a blog post. “Mike decided to restructure The Block by obtaining financing in the form of loans from Sam Bankman-Fried to LLCs that Mike owns and controls. Those loans, amounting to $27M, were made by Alameda Research and the funds were used to effect the restructuring and provide working capital directly to The Block.”
He added: “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, especially that of our reporters and researchers, as well as our efforts at industry-leading transparency.”
A $16 million batch of funding from Alameda was used in part to purchase an apartment in the Bahamas for McCaffrey, Axios reported. McCaffrey did not immediately respond to a request for comment.
FTX filed for bankruptcy last month, and Bankman-Fried stepped down as CEO. He tweeted on Friday that he would agree to testify next week before a House Committee on the collapse of FTX. He’s denied allegations of fraud.