Hindenburg is back!

VS
Its new target?
Block Inc run by Twitter co-
founder Jack Dorsey
I read the Hindenburg
Report so that you
don't have to

Here are their key

allegations
 Allegation 1

Banking for Criminals

Due to a complete absence of
KYC norms, Block was the
By Yugantar Gupta

preferred banking channel for

criminals. It was used by several
Meth Distribution Gangs

Hindenburg
vs.
Heisenberg?
 The Cash app was
used for the
following crimes
1. Drug Trafficking
2. Sex Trafficking
3. Attempted Murder
4. Child Pornography

By Yugantar Gupta
 Allegation 2

Inflated Users
Block claims it has 51 Million
Monthly Active Users. However, a
large portion of accounts were
duplicates i.e. having common
phone number, email or social
security numbers.

By Yugantar Gupta
 Allegation 3

Fake Accounts used for

Scams
Anyone could create an account
in any name. There were dozens
of accounts in the name of Elon
Musk, Donald Trump and Jack
Dorsey. These were then used for
phishing scams, identity theft and
hacking accounts
By Yugantar Gupta
 Hindenburg researchers
applied for a card in the
name of Donald Trump and
received it!
 Allegation 4

Theft of COVID relief funds

The biggest allegation is theft of
billions of dollars of taxpayers
money meant for COVID relief.

Jack Dorsey actively encouraged

users to avail state sponsored
benefits and stressed that Bank
Accounts were not needed
By Yugantar Gupta
 The benefits availed through Sutton
Bank (a small bank partnering with
Block) exceeded those of JP Morgan
and Wells Fargo, who had 8-10x more
bank accounts.

Multiple claims were processed into

the same bank account. Many users
availed benefits from multiple states

Employees and regulators had flagged

this, Block knew about this, but did
not stop it.
By Yugantar Gupta
Hindenburg says that this
was deliberately done to
boost revenues and
profits!
Block charges around 2 to
3% for instant withdrawal
so it directly made money
from COVID relief fraud
By Yugantar Gupta
 Allegation 5

Insiders cashed out after

the share prices surged

The share price of Block rose

639% based on high revenue
growth built on enabling fraud

Jack Dorsey and his co-founder

James McKelvey sold more than
$1 Bn worth of stock at these
inflated prices
 Allegation 6

Gouging Merchants
through high fees

Interchange fees are capped for

Financial Institutions with more
than $10bn dollars in assets.
Block had $31bn but used a
small bank to funnel payments.
This allowed it to charge
exorbitant fees to merchants
 Allegation 7

Unregulated lending in the

name of Buy-Now-Pay-Later
Block acquired Afterpay, a BNPL
startup for $29 Bn. Using BNPL,
Block was able to lend money
without doing a credit check

They lent to the most vulnerable

groups at exorbitant annualised
rates of upto 289% p.a.
 What now?
The share price of Block had
already fallen 74% from its peak
before publication of Hindenburg's
report

It fell a further 22% in 1 day after

the report (later it rose, reducing
the loss to 15%)

By Yugantar Gupta
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