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March 30 (Reuters) – Block Inc’ SQ.N Cash App had more than 51 million monthly transacting active customers, of which 44 million were verified through its identity verification program as of Dec. 31.
The disclosure follows Hindenburg Research taking a short position in Block last week after alleging that the payments firm led by Twitter co-founder Jack Dorsey overstated its Cash App user numbers and understated its customer acquisition costs.
The payments firm estimated that the 44 million verified accounts constituted nearly 97% of Cash App inflows in December 2022.
Hindenburg, which was also behind a market rout of more than $100 billion in India’s Adani Group in late January, said in its report that former Block employees estimated that 40%-75% of accounts they reviewed were fake, involved in fraud or were additional accounts tied to a single individual.
Block has denied the allegations, saying it would explore legal action against the short seller for its “factually inaccurate and misleading report” that was “designed to deceive and confuse investors”.
Shares in Block were up 2.6% at $68.22 in afternoon trading.
(Reporting by Manya Saini in Bengaluru; Editing by Pooja Desai and Arun Koyyur)
((Manya.Saini@thomsonreuters.com;))
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