![]() In response to the Hindenburg report, Block said in a statement, “We intend to work with the SEC and explore legal action against Hindenburg Research for the factually inaccurate and misleading report they shared about our Cash App business today.” The company also stated that it has “reviewed the full report in the context of our own data and believe it’s designed to deceive and confuse investors.Ī troubling aspect of the reported fraud is how Block’s financial products have allegedly been used in alleged criminal activity. The company claims to have 51 million monthly transacting users, but Hindenburg’s research alleges this figure included many fake and duplicate accounts, with a former employee corroborating how users engaged in fraud could be associated with up to “hundreds” of active accounts-which meant that “blacklisted” users were never actually banned from the platform, and which helped create inflated numbers of “transacting users” that didn’t represent real, unique customers. Among other acts, Block has reportedly shared falsely high user counts and falsely low customer acquisition costs, two key metrics that have inspired confidence and excitement in the company’s future. The Hindenburg report alleges the business has engaged in predatory practices for those “underbanked” consumers it claimed to serve and further committed fraud to avoid regulation and mislead investors. ![]() ![]() Matt Crossick/PA Images via Getty Images, Ben Gabbe/Getty Images for The Association of Magazine Media
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