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The Block's CEO previously loaned $43 million to SBF, acquired property in the Bahamas, and the COO has now taken over as CEO.

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The Block

The Block reported that last year's company acquisition was funded by CEO Michael McCaffrey's loan from SBF, with $16 million of it used for real estate in the Bahamas. According to The Block's Chief Revenue Officer Bobby Moran's statement, he will assume the CEO position immediately.

Restructuring in April 2021

Bobby Moran pointed out that Michael McCaffrey informed him of this news before Thanksgiving. At the beginning of 2021, Michael was evaluating the next steps for The Block, whether it would be a merger, acquisition, or restructuring. Ultimately, The Block completed a management buyout in April last year, transforming into a 100% employee-owned organization including research and news teams. (source)

Michael became the CEO as a result and he was the one who borrowed money from SBF on behalf of the company to fund the restructuring and daily operations. Bobby Moran stated:

No one besides Michael knew about this financial plan, which shocked and disappointed The Block's leadership. His failure to disclose this information shows a severe lack of judgment, damaging the reputation of The Block's journalists and researchers, as well as our efforts in transparency. He agreed that he will no longer be responsible for daily operations.

Destination of Three Loans

Michael received three loans:

  • The first loan of $12 million: used for acquiring The Block in 2021 and taking over daily operations.
  • The second loan of $15 million: used for daily operations.
  • The third loan of $16 million: used for property in the Bahamas.

Michael will resign from the board but will remain one of the major shareholders of The Block.

Prior to this, The Block did not have a board of directors, with only Michael. The number of board members will now expand to three, with two vacancies currently being recruited for.

The Block's Head of Research: This Year Has Been Tough

Larry Cermak tweeted that the past few months couldn't have been worse. After naively believing in FTX, it was messed up again by the former CEO. He, like other colleagues at The Block, was unaware. He emphasized:

Needless to say, I did not benefit in any way from Michael's loans. In fact, my personal losses at FTX are about the same as my salary at The Block over the past four years, and I have never borrowed money from anyone. I am proud of the research team of over 30 people that I have built and will continue to work with the new leadership of The Block. I am tired and will start focusing on what's important, which is less time on Twitter and more time with my wife and four-month-old daughter.