On Thursday, Former Twitter CEO Jack Dorsey’s Block formerly known as Square, Accused of Fraudulent Activity by Hindenburg Research. The recent allegations made by the short seller have caused Jack Dorsey to take a major hit. According to the report released by Hindenburg, the fintech company’s Cash App platform was allegedly rife with fraudulent behavior and fake accounts that were used to artificially boost user counts and create an illusion of success.
Furthermore, the popular Cash App has been used by many criminals to flourish criminal activity due to its lack of proper oversight and security measures, according to the report. Hindenburg also claims that JPMorgan Chase, the bank behind Block’s products, failed to adequately review former Block employees with access to sensitive customer data.
Furthermore, they stated that Dorsey had been aware of these issues but refused to take legal action against them. In response to the allegations, Dorsey issued a statement denying all charges made against him and his company. He maintained that Block’s accounting practices were sound and compliant with all applicable laws.
These allegations are significant, given that Block is a well-known presence in the financial technology space and its founder, Jack Dorsey, is a highly influential figure. The financial implications of these accusations have already been seen, as the company’s value has dropped by 20% wiping out billions of dollars in shareholder value in the wake of the news. It is unclear exactly how much truth there is to the accusations. However, it is certain that Jack Dorsey and Block will have to take steps to address this issue and clear their name if they wish to remain successful in the future.