Cermak jokes about accidentally leaking details of secret loans from Alameda to The Block CEO as SBF sponsorship of The Block comes to light.
VP of Research at The Block Larry Cermak has ruefully joked about the unfortunate events he has had to deal with in recent months. Notably, in a tweet on Friday, the researcher highlighted that the biggest irony was accidentally leaking records of private loans to The Block CEO from Sam Bankman-Fried.
Notably, a report from Axios on Friday revealed that SBF secretly funded the crypto media and research outlet through loans to The Block chief Michael McCaffrey. Per the report, no one else knew about the loans besides McCaffery till hours before the report.
In February last year, The Block chief reportedly entered talks with SBF to finance loans to buy out initial investors. Subsequently, Limited Liability Companies controlled by McCaffery received three loans from Alameda, which include:
- An initial $12 million to buy out investors.
- A second $15 million in January for capital.
- And $16 million later this year, from which McCaffery purchased an apartment in the Bahamas.
McCaffery has since resigned, per a report from The Block on Friday. However, McCaffery’s actions have put the integrity of the respected news outlet under scrutiny, as well as the efforts of staff members like Cermak.
It is worth noting that Cermak lost money in the FTX collapse, with about 20% of his portfolio on the crypto exchange in what he describes as his biggest single-day loss. On Friday, expressing disappointment with the actions of McCaffery, Cermak pointed out that he, like other staff members had no knowledge of the loans and did not benefit in any way. According to Cermak, he lost roughly the same amount as he received from The Block in the last four years in the FTX collapse.
Eric Wall pointing out the irony in a separate tweet, noted that it was akin to Cermak paying his own salary for the past four years, as the crypto community speculates that FTX could have funded these loans with customer funds. In response, Cermak highlighted that the finishing touch was him unknowingly leaking 2 of the secret loans as part of a list of nearly 500 Alameda investments he shared on Tuesday, as he did not know that the LLCs had links to McCaffery.
I think the cherry on top is that I accidentally leaked my boss's secret loans from Alameda on Tuesday unknowingly. It's in this sheethttps://t.co/pABsGmD3wG
— Larry Cermak (@lawmaster) December 9, 2022
It bears mentioning that, as highlighted by The Block, McCaffery is the latest actor to be indicted in the wake of the shocking FTX collapse that had taken industry participants and staff, including Cermak, by surprise. On November 7, Cermak tweeted that FTX had a “near 0%” chance of being insolvent, a statement which, in hindsight, we know to be incorrect.
The latest development is even more ironic considering a tweet from the researcher on November 13. The researcher had said that in the past, The Block would have been more willing to take a lowball sponsorship deal from FTX based on its reputation than a better deal with others who had perceived questionable reputations.
Cermak made the statement highlighting how unexpected the FTX collapse was. Now it turns out SBF fully funded the Block.