Bankman-Fried secretly funneled millions to Crypto Outlet The Block

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Topline

Sam Bankman-Fried, the former CEO of bankrupt cryptocurrency exchange FTX, has made millions in under-the-table loans to crypto news publication The Block, the site revealed on Friday, the latest revelation from the depth of Bankman-Frieds’ influence, including at the institutions charged with holding Bankman-Fried accountable.

Sam Bankman-Fried testifying before Congress last December.

CQ-Roll Call, Inc via Getty Images Highlights

Alameda Research, the Bankman-Frieds personal trading firm, has lent a total of $43 million to Blocks CEO Michael McCaffrey over the past two years, the site says, in deals that have undermined the ability of so-called independent publications to report on FTX.

The block reports that the first $12 million went to McCaffrey to buy out the block’s investors, the next $15 million went to day-to-day operations, and the remaining $16 million went to purchasing personal real estate from McCaffrey in the Bahamas, which is also home to FTX. Bankman-Frieds headquarters and penthouse.

McCaffrey was the only Block employee aware of the arrangement, according to statements Friday from company editor Frank Chapparo and new CEO Bobby Moran.

Tangent

Bankman-Fried has publicly funded several other outlets, giving millions of dollars in grants to investigative publications ProPublica and the Intercept, making an undisclosed grant to the Voxs Future Perfect program, and making an undisclosed investment in Semafor in as part of the inauguration of new startups. funding cycle. The Intercept told Newsweek last week that it only used $500,000 of Bankman-Frieds’ $4 million, while internal ProPublica communications seen by Newsweek claimed that ProPublica only used a third of its $5 million grant, with each outlet putting the remaining money on hold. Vox says the next project for the Bankman-Frieds grant is also on hiatus. Semafors CEO Justin B. Smith said last week that Bankman-Fried didn’t actually own stock in the company, but rather bought what could later turn into a less than 10% stake. The Bankman-Frieds Semafor investment caught the eye of Elon Musk, the world’s richest man and new owner and CEO of Twitter, last month after the outlet reported that Bankman-Fried owned an undisclosed stake in Twitter. Musk denied the report and shot back: Semafor is owned by SBF. This is a huge conflict of interest in your reporting. Journalistic integrity is . Semafor did not respond to a request for comment.

Key Context

Once considered an unassuming golden boy of cryptos, public sentiment quickly turned against Bankman-Fried after FTX filed for bankruptcy last month following a series of unsavory and likely illegal business practices. Bankman-Fried has also spent millions with policymakers, donating $39.9 million to Democratic causes this election cycle as well as an undisclosed amount of shady contributions to Republicans, while his frequent meetings with regulators Federal financials, including with the head of the Commodity Futures Trading Commission, also came under scrutiny following the collapse of FTX.

crucial quote

It’s literal scum. He kept all of us in the dark, Chapparo tweeted of McCaffrey on Friday, adding that Blocks employees had only been briefed on the matter hours earlier.

Further reading

Exclusive: Crypto news site secretly funded by SBF (Axios)

Sam Bankman-Fried, Elizabeth Holmes and 9 other epic billionaire blasts (Forbes)

Exclusive: Sam Bankman-Fried knew a lot about his research hedge fund Alameda and sent details to Forbes just a few months ago (Forbes)

How Sam Bankman-Fried sold the Bahamas an empty crypto dream (Forbes) ftk

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