A class action lawsuit against former FTX CEO Sam Bankman-Fried and bankrupt crypto exchange FTX has been dropped. Meanwhile, it was revealed that Alameda Research was secretly transferring funds to a cryptocurrency company. Here are the details…
Lawsuit against celebrities advertising FTX dropped
A class action lawsuit against a number of famous promoters over the FTX issue was dropped. On Thursday, attorneys for the case’s lead plaintiff, Edwin Garrison, filed a voluntary dismissal notice with the US District Court for the Southern District of Florida. The first lawsuit, filed in Miami, called FTX “an unsound enterprise, a pyramid scheme where FTX entities mix customer funds among their non-transparent affiliates.”
None of the defendants in the case, including Bankman-Fried, NFL quarterback Tom Brady, comedian Larry David, tennis player Naomi Osaka and the NBA’s Golden State Warriors, had been served with subpoenas or complaints, according to Thursday’s announcement. The case initially required compensation for unspecified damages and a trial by jury. However, it seems to have dropped now.
Alameda funded this cryptocurrency company
On the other hand, The Block confirmed on Friday that the crypto media site has been secretly funded by Sam Bankman-Fried’s Alameda Research over the past two years. The Block’s CEO, Michael McCaffrey, resigned soon after the funds came to light. He will also step down from The Block’s board of directors. The company said no one in the company except McCaffrey knew about the loans.
According to The Block, McCaffrey took out three loans from 2021 to this year, totaling $43 million. The initial loan was $12 million in 2021 to buy out other investors in the media company, at which time McCaffrey took over as CEO. The latter was $15 million in January to finance day-to-day operations, according to The Block. The third was $16 million for McCaffrey’s purchase of personal real estate in the Bahamas earlier this year.
According to the report, The Block’s head of revenue, Bobby Moran, will step into the CEO role with immediate effect. “No one at The Block except Mike knew about this financial arrangement,” Moran said in a statement. “From our own experience, we have seen no evidence of Mike attempting to improperly influence the newsroom or research teams, particularly in the SBF, FTX and Alameda Research news stories,” he added.
McCaffrey: Loan was the only option
cryptocoin.com Bankman-Fried, known as SBF as we reported, is the founder and former CEO of FTX, a crypto exchange that filed for bankruptcy after revealing an unusually close relationship between FTX and Alameda, a trading firm affiliated with FTX. In a thread of tweets Friday, McCaffrey said in early 2021 the company was in trouble and the “only option” was to take a $12 million loan from SBF for the holding company.
He said he did not disclose this loan and the subsequent $15 million loan to anyone, as he did not want his knowledge of the loan to be seen as jeopardizing the objectivity of Bankman-Fried and his companies’ reporting. McCaffrey added that he “never tried to influence the news of FTX, Alameda or SBF.”
