Crypto news site CEO borrowed millions of dollars from SBF, bought property in the Bahamas: Report

Sam Bankman-Fried loaned millions of dollars to an independent cryptocurrency news website, with its CEO failing to disclose them to his team, Axios reported.

The revelations have raised questions about the credibility of The Block website, that has been extensively covering the FTX collapse.

According to Axios, Michael McCaffrey, who has now stepped down as the CEO of The Block, received two loans from Alameda Research totalling $27 million for the restructuring of his company. A third loan, of $16 million, was partially used by McCaffrey to purchase property in the Bahamas -- from where FTX was run.

Bobby Moran, the chief revenue officer of The Block, confirmed the transactions to Axios.

In a statement later, Moran said The Block's team was shocked and disappointed by the revelations.

"Mike’s (Michael McCaffrey'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," he said.

"No one at The Block had any knowledge of this financial arrangement besides Mike," Moran, who replaced McCaffrey as CEO, added. "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."

The Block editor Frank Chaparro said he was "gutted" by the news.

"Underpinning my shock are feelings of utter disgust and betrayal by Mike’s actions, greed, lack of disclosure," he wrote. "He kept every single one of us in the dark."

1) I'm absolutely gutted by this news, which was briefed to the company this afternoon.

Underpinning my shock are feelings of utter disgust and betrayal by Mike’s actions, greed, lack of disclosure. He's literal scum. He kept every single one of us in the dark. https://t.co/jIZCxtHrfc

— Frank Chaparro (@fintechfrank) December 9, 2022

His colleagues also expressed anger.

"Depressing, baffling news," wrote Ryan Weeks. "What angers me most is that we are now forced to defend our work - which I’ve been particularly proud of this year - because of the actions of one person. Bitterly disappointing."

Sam Bankman-Fried faces jail time for billions of dollars of missing customer funds from the now-bankrupt FTX.

He accepted making a "lot of mistakes" but claimed he was not knowingly engaged in fraud.

Once the trusted face of cryptocurrency, Bankman-Fried has drawn fierce backlash for the meltdown of FTX.

Restructuring expert John J Ray, who took over as CEO of FTX, said he had never seen such lack of transparency before.

"From compromised systems integrity and faulty regulatory oversight abroad, to the concentration of control in the hands of a very small group of inexperienced, unsophisticated and potentially compromised individuals, this situation is unprecedented," he was quoted as saying by AFP.

(With inputs from AFP)