Tag: jack dorsey

Jack Dorsey’s Block Reportedly Under Investigation in the US

After Binance and Coinbase, the authorities in the US are now reportedly opening an investigation on the crypto business of Jack Dorsey’s payments firm, Block. As per reports, the US authorities have identified compliance violations from the fintech company that has now opened a deeper probe into its business practices. For some time now, authorities in the US have been maintaining a strict overview of companies that are engaged with or offering crypto-related services. The sector is loosely regulated in the US and authorities are concerned that cryptocurrencies could be misused for unlawful activities like money laundering and terror financing.

Dorsey, the founder and former CEO of X, operates two more companies under Block named Cash and Square. The investigating officers have reportedly collected documents from both of these units. The obtained paperwork show that these platforms were not collecting ample information of their users before offering them financial services that includes crypto-related activities, the NBC News has said in its report citing anonymous sources familiar with the matter.

The investigators have further alleged that the Block platform had been processing multiple crypto transactions even from nations that are part of US’ sanctions list. The investigating officials have alleged that Dorsey’s platforms have not being reporting potentially suspicious transactions related to credit cards and dollar-to-BTC transfers to the US government, as is required.

It was a former employee working for Dorsey, who first alerted the US officials about loopholes in the business operations of Block and its subsidiaries. Documents printed on over a hundred pages were handed over to the US officials from this former Block employee, the report added. As of now, Dorsey has not addressed the situation leaving the report neither confirmed nor denied.

Recently, Block claimed that it had completed the creation of a 3nm bitcoin mining chip that is aimed at decentralising the supply of BTC mining hardware. The platform now plans to work on a full Bitcoin mining system.

In February this year, Dorsey disclosed that Block held 8,038 BTC at the end of the fourth quarter of 2023. At the time, this holding was worth $340 million (roughly Rs. 2,818 crore).

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Reddit, Jack Dorsey’s Block Reveal Crypto Investment Details as Tech Firms Begin Experimenting With Web3

2023 brought the crypto sector face to face with regulatory and macro-economic challenges – that kept the price points of majority cryptocurrencies relatively low. Despite the volatility that the sector witnessed last year, several corporate firms did not lose hope on their crypto engagements. Social networking platform Reddit and Jack Dorsey’s fintech firm Block are two names that have recently disclosed information related to their BTC holdings and investments, which yielded profits for both.

The current crypto market cap stands close to $2 trillion (roughly Rs. 1,65,78,200 crore) with Bitcoin currently trading at $51,017 (roughly Rs. 42.2 lakh). The crypto sector has seen a rise in valuation so far in 2024. Bitcoin was trading at $43,064 (roughly Rs. 35.8 lakh) in December last year.

In fresh filings, both Reddit and Block have revealed their investments in BTC, ETH, and other cryptocurrencies.

Reddit

In a filing with the US Securities and Exchange Commission (SEC), Reddit said it has purchased Bitcoin and Ether from the excess cash it managed to save. While the platform has not exactly disclosed the exact worth of Bitcoins it purchased, the filing showed that Reddit had managed to hold $1.3 billion (roughly Rs. 10,778 crore) in cash by the time it wrapped up the 2023, a report by Coindesk said on Friday, February 23.

With this, Reddit has become one of the few companies alongside MicroStrategy and Tesla that has directly invested its cash holdings into purchasing BTC and ETH.

Block

Jack Dorsey, the founder and former CEO of Twitter (now X), disclosed his fintech firm Block’s fourth quarter earnings on Thursday. The filings noted that Block held 8,038 BTC which was worth $340 million (roughly Rs. 2,818 crore) on December 31, 2023. At present, the value of these tokens stands at $409 million (roughly Rs. 3,398 crore).

Dorsey also said that Block managed to churn $66 million (roughly Rs. 547 crore) through the sale of BTC tokens through its subsidiary, the Cash App – clocking a 90 percent increase from 2022.

“The year-over-year increase in Bitcoin revenue and gross profit was driven by an increase in the average market price of bitcoin as well as a benefit from the price appreciation of our bitcoin inventory during the quarter,” Block said in is filing as per a different report by Coindesk.

Crypto-focused merchant bank Galaxy Digital Holdings, crypto brokerage Voyager Digital, and Bitcoin mining company Marathon Digital are among other firms that have investments in crypto.

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Jack Dorsey’s Block Shakes Off Short Seller Hindenburg’s Report to Post a Rise in Quarterly Revenue

Block posted a rise in first-quarter revenue on Thursday as its popular payments platform Cash App continued to drive growth, a metric investors will watch closely following U.S. short-seller Hindenburg Research’s disclosure in March of short positions in the firm.

Shares of Block, formerly called Square, were up more than 1 percent in extended trading on Thursday, paring gains after rising more than 4 percent. Prior to market close, its stock was down more than 10 percent from the beginning of this year.

The company posted total net revenue of $4.99 billion (roughly Rs. 40,800 crore) in the quarter ended March 31, up 26 percent from the prior year and beating analysts’ estimate of $4.59 billion (roughly Rs. 37,500 crore), according to Refinitiv data.

The San Francisco-based fintech, which offers merchant payment services and an app that facilitates peer-to-peer payments and lets people trade cryptocurrency, said gross profit in the first-quarter rose 32 percent to $1.71 billion (roughly Rs. 14,000 crore).

Hindenburg, whose report this year triggered a rout of more than $100 billion (roughly Rs. 8,17,200 crore) in shares of India’s Adani Group companies, had accused Block of overstating its user numbers by allowing fake or duplicate accounts to exist on its Cash App platform. The allegations sent shares in the company down 22 percent.

Reuters could not verify the claims raised in the report. Block has denied the allegations and has said it would explore legal action against the short seller. Short sellers like Hindenburg typically sell borrowed securities and aim to buy these back at a lower price.

In a call with analysts, Block CEO Jack Dorsey said the firm stands by its response to the report.

“We will not be distracted from our strategy and from our prioritizations,” he said. “We have a pretty compelling roadmap ahead of us in every one of our ecosystems.”

Block’s revenue growth has moderated over the past few quarters as inflation prompted consumers to defer big-ticket purchases. In its previous earnings report, the payments firm said it was “meaningfully slowing” the pace of hiring this year to control costs.

© Thomson Reuters 2023

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Short seller Hindenburg accuses Jack Dorsey’s Block of ‘facilitating fraud’

Hindenburg Research, the short-seller whose damning report on Indian billionaire Gautam Adani triggered a $150 billion loss from the mogul’s net worth, is now accusing Jack Dorsey’s mobile payment firm Block of “facilitating fraud against consumers and the government.”

Hindenburg on Thursday alleged that Block overstated its user numbers and understated its customer acquisition costs.

Shares of Block, which developed the popular Cash App mobile payment facilitator, plunged by some 20% just after the opening bell rang on Wall Street on Thursday.

The Post has sought comment from Block.

“Our 2-year investigation has concluded that Block has systematically taken advantage of the demographics it claims to be helping,” the short seller said in a note published on its website.

Hindenburg claims that Block “obfuscates” the number of customers registered on its Cash App platform by reporting misleading “transacting active” metrics filled with fake and duplicate accounts.


In January, Hindenburg released a damning report alleging fraudulent business practices by Indian billionaire Gautam Adani.
REUTERS

The firm said that Block co-founders Dorsey and James McKelvey collectively sold over $1 billion of stock during the pandemic as the company’s share price soared.

Other executives including finance chief Amrita Ahuja and the lead manager for Cash App Brian Grassadonia also dumped millions of dollars in stock, the report added.

Before releasing its findings on Thursday morning, Hindenburg teased that it would be issuing a “new report soon — another big one.”

The tweet on Wednesday went viral, generating more than 31,000 likes and 6 million views as of Thursday morning.

About 5.2% of Block’s free float shares were in short position as of March 22, according to Ortex data.

The company’s ticker was third most trending on retail investor focused forum StockTwits.

Last month, Block said it is “meaningfully slowing” the pace of hiring this year to control costs.

Founded in 2017 by Nathan Anderson, Hindenburg is a forensic financial research firm that analyses equity, credit and derivatives.


Shares of Block sank by some 20% after the opening bell on Wall Street on Thursday.
Getty Images

Hindenburg on Wednesday teased that it would be releasing a “big” report.
Christopher Sadowski

Hindenburg invests its own capital and takes short-positions against companies. After finding potential wrongdoings, the company usually publishes a report explaining the case and bets against the target company, hoping to make a profit.

In late January, Hindenburg published a report alleging that Adani’s port-operating conglomerate engaged in stock manipulation and fraudulent accounting practices to artificially inflate the value of his company.


Block is the developer of the popular payments facilitator Cash App.
REUTERS

At the height of his wealth, Adani was worth more than $150 billion last year — exceeding that of Amazon founder Jeff Bezos.

Earlier this month, Adani’s net worth dipped to less than $38 billion.

He has since been seeking to win back investor confidence after the Hindenburg report triggered a massive selloff in company stock.

With Post Wires



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Jack Dorsey’s Conceptualisation of ‘Blockchain Twitter’ Tickled Elon Musk, Leaked Texts Tip

Elon Musk is currently in a legal process involving his refusal to buy micro-blogging site Twitter. In the backdrop of this case, a bunch of leaked messages between Musk and Twitter founder Jack Dorsey indicate that the duo had been dabbling in the idea of moving Twitter to blockchain, eliminating its dependency on government controlled, centralised systems. The messages were exchanged before Dorsey stepped down as the CEO of Twitter in November 2021.

Discussing how ideal Twitter should be, Dorsey suggested an ‘open source model’ that is handled by a foundation, that contributes to the protocol without having any owning rights on the platform.

At the time, Musk had validated Dorsey’s proposal calling it a “super interesting idea”, the leaked messages have tipped.

“I think it’s worth both trying to move Twitter in a better direction and doing something new that’s decentralised,” the Tesla CEO had noted.

Dorsey has also expressed reservations against Twitter having transformed into an advertisement hub these recent years.

One of his main goals with shifting Twitter to the blockchain will be to rid it of its position as an advertising model.

Dorsey had highlighted that advertisements give companies and governments a ‘surface area’ to control social networking platforms.

Twitter becoming a ‘company’ is Dorsey’s biggest regret, he had claimed in a tweet earlier in August.

In April this year, Musk purchased a 9.2 percent stake in Twitter and two weeks later he offered to buy the company for $44 billion (roughly Rs. 3,59,855 crore).

Musk however, began reneging on the Twitter buyout, claiming that the company hadn’t levelled with him about the number of spam and bot accounts among its more than 230 million users.

Twitter says Musk has buyer’s remorse and his concerns are a pretext to get out of a deal.

A trial on October 17 in the case will most likely finalise if Musk, the richest man in the world, can or cannot walk away from buying Twitter out.

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‘The Bitcoin Academy’: Jack Dorsey, Jay-Z Open Free Education Programme on Crypto

In a bid to provide free-of-cost knowledge around cryptocurrencies, Twitter founder Jack Dorsey and hip-hop artist Jay-Z have decided to launch a course. The name of this initiative is called ‘The Bitcoin Academy’, and it will organise a series of classes on crypto trading and minting, that will break down the informational barrier for the residents of Marcy Houses in Brooklyn, that also happens to be the hometown of Jay-Z. These free crypto classes, which will be available in-person and online, will be presented by Crypto Blockchain Plug and Black Bitcoin Billionaire.

Crypto expert Najah J. Roberts of Crypto Blockchain Plug, and software developer Lamar Wilson from Black Bitcoin Billionaire will be leading this educational course.

“This program aims to provide education, empower the community with knowledge, and get rid of some of the barriers so that residents can learn more about Bitcoin specifically and finance in general,” the information available on the website of The Bitcoin Academy claimed.

Now married to pop singer Beyonce, Jay-Z grew up in the Marcy Housing Projects in Brooklyn, New York. The housing project is built and operated by the New York City Housing Authority (NYCHA) in order to provide shelter to underprivileged people.

The hip-hop performer is launching this crypto educational initiative, hoping to help people dwelling in Marcy Housings to get job training in the up-and-coming Web3 industry.

The classes under this course will go live in September. Along with education, attendees of these crypto classes will also be served dinner after in-person lectures.

Not just adults, The Bitcoin Academy will also be giving crypto classes to children aged between five and seventeen.

Dorsey’s online payments firm ‘Block’ (formerly ‘Square’) is providing additional grants and on-ground support for this initiative.

“The Bitcoin Academy is currently focused on Marcy Houses, but we hope to expand to other neighbourhoods soon. Those participating in the program will receive MiFi devices and a one-year limited data plan, plus smartphones if needed. Residents may keep the devices,” the website information added.

The development comes at a time when crypto mining and adoption, both are on a rise in the US.

In a recent report, Deloitte said that over 75 percent retailers in the US are interested in adopting cryptocurrencies as alternatives to traditional modes such as dollar and cards.

While the US government is yet to announce rules around the crypto sector, it has been taking measures to spread awareness around the sector among the masses.

In March, the US Treasury Department had launched an initiative to raise awareness about the risks of investing in cryptocurrencies.

The Treasury’s Financial Literacy Education Commission is also looking to create educational materials and organise outreach to inform the public about how crypto assets work and how they differ from other forms of payment.​

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Decentralised Twitter ‘Bluesky’ Outlines Code, Content Moderation Plans for Its Platform

Twitter is working on a decentralised social media project called ‘Bluesky’. In a recent development, the Bluesky team has released its first batch of codes, while reinstating its commitment to moderate the content that would be allowed on its platform. Decentralised social media aims to move the space beyond the control of tech giants who currently control the platforms. Blockchain-based decentralised social networking apps will operate on independently-run servers, curbing possibilities of targeted censorship.

In a blog post titled “Working in Public”, Bluesky released its “Authenticated Data eXperiment” (ADX) protocol code.

The team revealed that the core of ADX is “self-authenticating” data, that shifts the network authority to the users.

Outlining its content moderation plans, the Bluesky developers noted that they will be creating two separate layers for ‘speech’ and ‘reach’ on its platform.

“The speech layer can be as neutral as publishing a website. The reach layer determines what gets amplified across the network,” the team wrote on Twitter.

The developers behind Bluesky have vouched to publicly share the development process of its platform by releasing details about its work, before its complete.

In the case public feedback urges the team to explore another direction, the developers wish to keep some buffer time handy.

Jack Dorsey, former Twitter CEO, first announced the Bluesky project back in 2019.

While Dorsey still remains a board member of Bluesky, the project went independent in February after receiving $13 million (roughly Rs. 100 crore) in funding from Twitter.

Now that Twitter has accepted Elon Musk’s buy-out offer of $44 billion (roughly Rs. 3,37,465 crore), speculations around Bluesky’s future had begun buzzing on social media.

Clearing the air, Bluesky developers have said that the changes will have no bearing on the company.

The timeline of Bluesky’s release remains unclear for now.



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Twitter Funded Bluesky Claims It Is Independent From Elon Musk’ New Venture

Bluesky, a project funded by Twitter to build a decentralised standard for social media, has stated that the company is not controlled by the company following Elon Musk’s purchase. The Twitter-funded social media project explained, via a tweet that it has been independently operating as a public benefit limited liability company since February. The project, which seeks to rebuild how social media companies operate, followed up its initial tweet with a long sequence of notes explaining how it operates independently.

“The ‘public benefit’ part of our structure gives us the freedom to put our resources towards our mission without an obligation to return money to shareholders,” Bluesky tweeted. “The company is owned by the team itself, without any controlling stake held by Twitter.”

According to Bluesky, where former Twitter CEO Jack Dorsey remains a board member, it has $13 million (roughly Rs. 99.5 crore) in funding “to ensure we have the freedom and independence to get started on R&D.”

Bluesky’s demonstrated independence status makes it somewhat immaterial to Musk’s immediate plans to “revamp” Twitter. The Tesla CEO has already made it known that upon purchase of the social media giant, he would take it private. In addition, Musk also intends to promote “free speech” and minimize content moderation on Twitter.

Started in 2019 by Jack Dorsey, Bluesky gained momentum in 2021 primarily because of two key developments. The first was an ecosystem review of decentralised metaverse social apps serving crypto and Web 3 in January and second, the August appointment of Zcash veteran developer Jay Graber as its lead.

Since its inception, Bluesky has borrowed inspiration from several crypto projects. These include IPFS, a protocol that allows for peer-to-peer file sharing, as well as the Basic Attention Token that incentivises Brave browser users to watch ads.



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