A financial research firm, Hindenburg Research, claimed Block had facilitated fraud for criminals, allowing them to conduct criminal activities using the platform. The report alleges that the Block, formerly known as Square, failed to exert know-your-customer procedures, leading to inflated user metrics. It is not good news from a Block’s user perspective.
Jack Dorsey’s Block was accused of facilitating fraudulent activities
Hinderburg Research, a popular financial research firm, recently issued a report alleging that Block, the company formerly known as Square and owned by Jack Dorsey, which pivoted to blockchain and mining, was involved in the facilitation of fraud schemes. It is also accused of inflating user metrics by not enacting mandatory KYC procedures.
The report, published yesterday i.e March 23, 2023, says that the company Block allowed each of their users to have dozens or even hundreds of Cash App Accounts, with criminals taking advantage of the mission of the company, directed to serve the underbanked and the underserved.
According to the research firm, former employees of the company Block estimated that around 40 per cent – 75 per cent of the accounts available on their servers were fake, used to perform fraud-related activities, or extra accounts tied to a single individual. This is said to be a result of Block’s lax requirements for account creation on the platform, with users just needing an email or an account number.
Besides, the policies banning accounts and not individuals would allow blacklisted criminals to onboard again almost immediately just by using another email or phone number. And arranging a new phone number or email is not a big task for any criminal leading to high fraudulent activities.
Fake identities
As you know, the popular financial research firm, Hindenburg Research, claimed Block had facilitated fraud for criminals, allowing them to conduct criminal activities using the platform. Their report criticised Cash App’s features that allow its user to change their name and still use the platform’s services.
Hindenburg said they found dozens of Elon Musk, Jack Dorsey and many accounts with popular individual names in the app. Moreover, a Hinderburg employee was allegedly able to obtain a cash card with the name of Donald J. Trump.
What are your thoughts about the latest report issued by Hinderburg Research on Jakc Dorseys Block’s activities? How do you think Block can improve its platform to avoid such fraudulent activities? Let us know in the comments below. And if you found our content informative, share it with your family and friends.
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