November 13, 2023 at 17:32 GMTModified date: November 13, 2023 at 17:32 GMT
November 13, 2023 at 17:32 GMT

The Block distances itself from FTX scandal with Foresight Ventures deal

Crypto news site The Block has reportedly sealed the deal with Foresight Ventures, selling a majority stake to the venture capital firm based in Singapore.

Cryptocurrency news site The Block has reportedly sealed the deal with Foresight Ventures, selling a majority stake of its company to the venture capital firm based in Singapore. It has valued the deal at $70million.

Foresight Ventures, which holds some $400m in assets under management, is buying a stake worth roughly $60m for about an 80% share of the company.

This move is expected to help The Block distance itself from being embroiled in the FTX scandal associated with former crypto mogul, Sam Bankman-Fried. The media company’s former CEO, Mike McCaffrey, who is a majority shareholder, was found to have taken loans worth millions of dollars from SBF, the founder and former CEO of FTX.

McCaffrey was ousted from the company when this came to light. As per last year’s reports, he had used the funds to help finance a Bahamian property and a buyout of The Block’s non-employee shareholders in 2021.

In the latest deal, the VC firm used a vast majority of the capital to buy out McCaffrey’s stake, with the rest (under $1m) used to fulfill a change of control clause. This has made the media company’s CEO, Larry Cermak, the second-largest shareholder in the company, while Foresight CEO Forest Bai will become chairman, with partner Tony Cheng taking a board seat.

Cermak commented on the development saying: “Big news today as we announce Foresight Ventures acquired a majority stake in The Block. This tx gives The Block a fresh start ahead of the bull market and provides us with more capital to build out new exciting products and expand our footprint into Asia and the Middle East.”

Cheng also talked about how the team will now focus on helping companies bring in more users from Asia: “We’re seeing significantly more regulatory clarity in this part of the world. We’re also seeing significantly more capital flow into this region.”

Plans regarding this deal were started back in April this year by Foresight and The Block when the latter hired Moelis and Co. to run the process. The former has now also agreed to spend an undisclosed amount on ads with The Block during the first year.

Foresight is known for putting money in getting stakes in a number of Asian crypto media organisations like Block Temp and Foresight News, both for Mandarin-speaking audiences, and CoinNess, which is published in Korean. With its new deal, it seeks to help The Block systain the prolonged bear market which has seen a number of staff cuts and layoffs.

At the start of the year, even The Block laid off roughly 33% of its staff, which included interim CEO Bobby Moran.

Back the, the company was noted saying: “We are not immune to the contraction of the crypto market, and the economy more broadly. We grew too quickly to capitalise on a bull market in crypto. Now, we must shift our strategy and recalibrate our teams to align with the reality of the current market.“