The failure of Block’s chief executive to reveal the $27M advanced by Alameda Research, a firm affiliated with the embattled FTX Group, prompted the resignation. The revelations of ties with Sam Bankman-Fried forced Mike McCaffrey to resign for financing Block through secret loans.
Confirming the Secret Financial Arrangements
The December 9 announcement by Bobby Moran indicated that Mike McCaffrey restructured Block in 2021. The restructuring featured $27 million advanced by Alameda Research in two batches. However, Axios disclosed that McCaffrey received an additional $16 million loan from the same hedge fund affiliated with FTX Group. Axios reported that McCaffrey allocated the loan to acquire property within the Bahamas.
Moran lamented that the former chief executive demonstrated extreme inadequacy of judgment by the failure to notify the Block leadership team. Moran emphasized that The Block’s leadership team found McCaffrey culpable, thereby a compelling reason to resign.
Moran added that the financial arrangement secured from Alameda Research remained a secret only known by the former chief executive.
No Evidence of McCaffrey-Influenced Coverage
Nevertheless, Moran reiterated that preliminary scrutiny of Block reporting revealed no evidence that McCaffrey attempted to influence the platform’s newsroom coverage on matters involving FTX Group, Alameda Research and Bankman-Fried.
McCaffrey’s journey to head Block traces to 2018 when serving as the chief of staff. He would later assume the chief operating officer position before becoming Block’s chief executive in April 2020. Moran indicated that McCaffrey led the April 2021 buyout of non-employees from the platform. The buyout left McCaffrey with a majority ownership stake in the Block.
Employee’s Rebuking McCaffrey Secretive Loans
Larry Cermak, the vice president of research in Block, echoed Moran’s remarks that McCaffrey never demanded preferential coverage for FTX Group and its affiliated firms. He confirmed that the research team exercised their discretion in executing their duties.
Frank Chaparro, the platform’s editor-at-large, described McCaffrey’s actions as greedy and literal scum. Chaparro expressed displeasure at the revelation that McCaffrey betrayed the entire leadership team. He added that Mike was reckless in his actions to finance the platform from secretly advanced funds.
The announcement of secret loans obtained from Alameda leaves the news outlet lamenting the financial ties with the embattled FTX Group. Block has joined the list of parties, including political figures whose financial ties with the collapsed FTX Group empire were revealed in the ongoing bankruptcy proceedings.
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