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Block: Inflated user metrics and “frictionless” fraud facilitation

hindenburgresearch.com

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Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#31

Post by Gh0stRAT »

likecarter wrote: post #26
hef19898 wrote: post #22

Earlier quoted context omitted.

It reads a lot like what Wells Fargo did, re opening accounts, only targeting the criminal demographic.

Wells Fargo took advantage of black people and minorities, I wouldn't call them the criminal demographic. They were also the victims.

hef19898 wasn't saying Wells Fargo targeted the criminal demographic, they're saying Block did.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#33

Post by hef19898 »

likecarter wrote: post #26
hef19898 wrote: post #22

Earlier quoted context omitted.

It reads a lot like what Wells Fargo did, re opening accounts, only targeting the criminal demographic.

Wells Fargo took advantage of black people and minorities, I wouldn't call them the criminal demographic. They were also the victims.

What Wells Fargo did was despicable. What Block did, and I should have been a lot more concise, is similar in opening up multiple, and sometimes fake, accounts for show growth measured in number of accounts instead of actual deposits or clients. In that regard there are similarities. Wells Fargo targeted minorities, Block targeted criminals and fraudsters. This of course doesn't mean the people Wells targeted are criminals, as you said they were victims of Wells business practices.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#34

Post by lotsofpulp »

baryphonic wrote: post #28
propercoil wrote: post #2

[flagged]

The report is extremely long, but having gone through the bullet points, the case seems quite overstated. There are in fact millions of people who use Cash App, though it's probably less popular overall than Venmo. I know this because my wife and her friends will mention it and Venmo when talking about splitting bills. (Given the technical challenges Wells Fargo has had lately, I'm not sure who trusts Zelle.) A lot o…

>Given the technical challenges Wells Fargo has had lately, I'm not sure who trusts Zelle.

I trust Zelle (i.e. the bank itself) more than I trust a third party to ACH money into and out of my account.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#35

Post by rvz »

agentgumshoe wrote: post #4

This is bad for Block. I hope. It's incredible that since 2008 it actually seemed immensely easier to skirt regulations and laws (under the banner of 'innovation'), and not just in finance. Just about all of silicon valley seems to have run the longest and broadest grift we've seen. This year's gonna get real interesting.

> Just about all of silicon valley seems to have run the longest and broadest grift we've seen.

I would say nearly all of Silicon Valley tech startups. Around 90% them are a complete SaaS grift and are also eternally unprofitable and are very good at losing money.

Hence why they are solely dependent on begging for VC money every month to pump the pyramid scheme that recently collapsed a week a ago. We saw which startups were affected and would have instantly been bankrupt had it not been for them beggeing to the government for a totally-not-a-pseudo-bailout scheme to 'save' them.

To see who was caught in the fallout, we needed catalyst events such as the start of the market crash in November 2021, the collapse of crypto in 2022 and now in 2023, a large tech bank (SVB) becoming insolvent and failing.

> It's incredible that since 2008 it actually seemed immensely easier to skirt regulations and laws (under the banner of 'innovation'), and not just in finance.

Now the grift has continued to spread into the AI hype squad with everyone and their bots spinning their own ChatGPT SaaS startup. Don't be surprised to see them falling like dominoes since the real winner in this AI hype is OpenAI. Not the startups built around it.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#36

Post by phphphphp »

baryphonic wrote: post #28
propercoil wrote: post #2

[flagged]

The report is extremely long, but having gone through the bullet points, the case seems quite overstated. There are in fact millions of people who use Cash App, though it's probably less popular overall than Venmo. I know this because my wife and her friends will mention it and Venmo when talking about splitting bills. (Given the technical challenges Wells Fargo has had lately, I'm not sure who trusts Zelle.) A lot o…

If verifying people is hard and so a company chooses to take the easy route of not bothering and therefore attract lots of customers who do illegal things, surely in any world that's at the very least knowingly facilitating illegal conduct? There are a lot of platforms that do far more than Block to verify people -- Block absolutely could do the same if they wanted to.

This is what Block do: https://www.youtube.com/watch?v=J2uhWTFvug8

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#37

Post by chatmasta »

numlocked wrote: post #23

"CEO Jack Dorsey has publicly touted how Cash App is mentioned in hundreds of hip hop songs as evidence of its mainstream appeal. A review of those songs show that the artists are not generally rapping about Cash App’s smooth user interface—many describe using it to scam, traffic drugs or even pay for murder." Hindenburg made a music video compiling the references that is...uh...worth watching: https://www.youtube.co…

That was indeed worth watching.

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#38

Post by nluken »

noloblo wrote: post #14
agentgumshoe wrote: post #4

This is bad for Block. I hope. It's incredible that since 2008 it actually seemed immensely easier to skirt regulations and laws (under the banner of 'innovation'), and not just in finance. Just about all of silicon valley seems to have run the longest and broadest grift we've seen. This year's gonna get real interesting.

> Just about all of silicon valley seems to have run the longest and broadest grift we've seen. What do you mean by this

The “innovations” of many (but not all) post-2008 unicorns are more about creating a legal grey area to bypass regulation than they are actual technological advances. Uber and Airbnb are prime examples. If Uber was forced to used licensed cab drivers or Airbnb forced to use licensed hotels, you would see the breadth of what these companies actually bring to the table, which isn’t nearly as much as their valuations would indicate. That’s before we get into the adverse externalities these services can create (looking directly at Airbnb here)

Re: Block: Inflated user metrics and “frictionless” fraud facilitation

#39

Post by jevgeni »

overthrow wrote: post #24

I didn't know Square had changed their name to Block. Looks like it happened in December 2021: https://investors.block.xyz/news/news-details/2021/Square-In... That said this really seems overblown. The report seems to mostly just talk about Cash App. Square Payments, Weebly and TIDAL are not even mentioned. Afterpay is mentioned but that was a 2022 acquisition so the problems likely predate Block's involvement. It fe…

> Cash App, which analysts have said is the most important driver of the stock, has demonstrated signs of stagnation with slowing inflows and account growth.
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