Shares of American fintech company Block (formerly known as Square) plunged over 20% on March 23։ at the minimum for the day the shares at the New York Stock Exchange were trading at $56.5 for a piece.

Russian Forbes reports that it is 22,2% down than at the close of trading on March 22. In the evening, the fall of securities slowed to 13%.

The shares plunged following the report of short seller Hindenburg Research, a company of investor-activists who “expose” public companies. Hindenburg Research stated that it has investigated the activity of Block for two years and, as a result, took a short position in the stock. The company’s report claims that the Cash App, developed by Block, overlooked “red flags” of potential fraud, which contributed to billion-dollar frauds on benefits during the pandemic.

The Hindenburg Research report claims that Cash App failed to notice that the same account number was being used to receive government payments by multiple people. The Massachusetts administration told Hindenburg Research that it was seeking to claw back over 69,000 unemployment payments from Cash App accounts. In terms of the number of suspect transactions, Cash App has exceeded large banks such as JPMorgan and Wells Fargo, which have a lot more customers, the report notes.

Hindenburg Research also claims that Block highly inflates Cash App’s transacting user base. Block did not respond to a request for comment, according to Bloomberg.

Payments company Block, known as Square until 2021, is chaired by Twitter co-founder Jack Dorsey. The company’s main products are a payment service for merchants and the Cash App mobile application.



In 2021 Block acquired Australian startup Afterpay for $29bn. At its peak that year, Block’s market capitalization was nearly $130 billion, Bloomberg notes. But since then, the company has lost most of its value. At the close of trading on March 23, its capitalization was $41 billion.

Hindenburg Research, investment research firm with a focus on activist short-selling, became known in 2020 after it released an investigation report on a “sophisticated scam” at green truck startup Nikola. The authorities began their investigation following the report, and in 2022, the founder of the startup Trevor Milton was found guilty of fraud.

The partner of Fintech section is