Crypto media site The Block was secretly funded over the last two years by Sam Bankman-Fried's Alameda Research, The Block confirmed on Friday.
The Block's CEO, Michael McCaffrey, immediately resigned after the loans came to light, and will also step down from The Block's board. The company said no one at the company had any knowledge of the loans except for McCaffrey.
According to The Block, McCaffrey received three loans for a total of $43 million from 2021 through this year. The first loan was for $12 million in 2021 to buy out other investors in the media company, at which time McCaffrey took over as CEO. The second was for $15 million in January to fund day-to-day operations, and the third was for $16 million earlier this year for McCaffrey to purchase personal real estate in the Bahamas, according to The Block.
Bobby Moran, The Block's chief revenue officer, will step into the role of CEO, effective immediately, according to the report.
"No one at The Block had any knowledge of this financial arrangement besides Mike," Moran said in a statement. "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."
Bankman-Fried, known as SBF, is the founder and former CEO of FTX, a crypto exchange that filed for bankruptcy last month after CoinDesk revealed an unusually close relationship between FTX and Alameda, a trading firm affiliated with FTX.
In a tweet thread on Friday, McCaffrey said that in early 2021, the company was in dire straits and "the only option that materialized" was to secure a $12 million loan for his holding company from SBF.
He said he didn't disclose that loan, nor a subsequent $15 million loan, to anyone since he didn't want knowledge of the loan to be seen as compromising the objectivity of the coverage of Bankman-Fried and his companies.
McCaffrey added that he "never attempted to influence coverage of FTX, Alameda or SBF."
Frank Chaparro, an editor-at-large at The Block, said in a tweet that he was "gutted by this news, which was briefed to the company this afternoon, adding that McCaffrey "kept every single one of us in the dark."
The Block is a competitor to CoinDesk.
Axios previously reported on the news of the loans.
UPDATE (Dec. 9, 19:45 UTC): Updated with additional background throughout.
UPDATE (Dec. 9, 20:46 UTC): Updated with tweets from McCaffrey.