Former Twitter CEO Jack Dorsey’s payment processing firm Block suffered a stock price drop of 15 percent this week after claims by Hindenburg Research that the company has facilitated fraud and inflated its user numbers.
Researchers were reportedly able to set up a Cash App account in the name of former President Donald Trump, and even secure a Cash App card with his name on it.that after Hindenburg Research released a damning report on Block, the payment company founded by former Twitter CEO Jack Dorsey, its stock value fell by nearly 15 percent.Block of artificially inflating the number of users for its Cash App product while allowing criminal activity to thrive on its platform with insufficient controls.
Numerous former employees were questioned as part of the short seller’s investigation. They claimed that despite widespread fraud and criminal activity on the platform, internal concerns were dismissed and user issues were not taken seriously. The report highlighted alleged financial misreporting and included screenshots of internal systems, employee messages, and other content.
The research firm criticized Cash App’s methods when the U.S. government issued stimulus checks during the coronavirus pandemic. According to Hindenburg, management pressure resulted in a pattern of noncompliance with Know Your Customer and anti-money laundering regulations. Hindenburg created accounts in the names of former president Donald Trump and Tesla CEO Elon Musk in order to test this theory. The company even acquired a Cash App card in Trump’s name.
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