Sam Bankman-Fried (SBF), former CEO of now bankrupt crypto exchange FTX, gave $27 million in a series of undisclosed loans to Michael McCaffrey, CEO of crypto news website The Block, to help it stay afloat.
Bankman-Fried also loaned McCaffery $16 million, some of which helped him purchase property in the Bahamas, where FTX is headquartered, according to Axios.
McCaffrey has resigned after “failing to disclose a series of loans from disgraced former FTX head Sam Bankman-Fried’s Alameda Research”, The Block said late on Friday.
“He was the only person with knowledge of the funding at the company,” it added.
Bobby Moran, The Block’s chief revenue officer, will step into the role of CEO, effective immediately.
Moran wrote in a Medium post that those loans, amounting to $27 million, were made by Alameda Research and the funds were used to effect the restructuring and provide working capital directly to The Block.
“This news came as both a shock and disappointment to The Block leadership team. McCaffrey’s decision to take out a loan from SBF and not disclose that information demonstrates a serious lack of judgment,” said Moran.
“As a result of his actions, we have asked him to step down. He will have no day-to-day management or operational responsibilities at The Block.”
Meanwhile, SBF, facing charges of swindling billions of dollars, said he is not prepared to testify before a US Congress committee hearing on December 13.
The US House Financial Services Committee is probing the controversial collapse of the crypto exchange that wiped out billions of investors’ money.
According to reports, SBF “secretly transferred $10 billion in FTX client funds to his trading house Alameda Research”.
FTX filed for bankruptcy last month after its possible merger with leading crypto exchange Binance did not materialise.
