Following Elon Musk’s accusations that Twitter artificially inflated its metrics, Jack’s other company is in the spotlight.
The firm claimed that 40% to 70% of Cash App’s 51 million active users were “fake, involved in fraud” or were just multiple accounts tied to the same user. More than that, the report claims that Block was focusing on getting “criminals” to use the app for facilitating identity fraud and other grifts, then allowing them to withdraw funds quickly. Instead of banning users found to be facilitating fraud, Hindenburg said Block banned the individual accounts without blacklisting the actual grifter.
Hindenburg are known short sellers, and after the firm released its report, shares of Block dived more than 20%, according to. While Hindenburg is using this report to put Block into a new short position, the two-year investigation included interviews with former employees and review of public and private documents. Despite Hindenberg’s obvious financial incentive, the report included many specific claims that Cash App was inflating Cash App’s userbase.
Even stranger, the report alleged Twitter co-founder Jack Dorsey had been promoting how often Cash App was used in hip hop and rap songs, but the songs themselves often promoted just how often the app was used for crime. Hindenberg included a in its report with songs that included tracks from the likes of rappers like Lil Durk and Juice WRLD talking about paying for hits and drugs on Cash App. The firm alleged Block paid to promote 22Gz’s songwhich mentioned hiring contract killers using the payment service, and how the rapper was arrested last year over
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