Citi says Block fraudulent activity not as widespread as claimed

Block yesterday issued a response following last week’s short report, disclosed that 44M accounts versus 51M transacting actives as of Dec ember 2022 were connected to Block’s identity verification program and that these accounts accounted for 97% of Cash App inflows, Citi the analyst tells investors in a research note. Block recognized fraud activity did pick up during the pandemic, though indicated compliance spend since 2019 has increased by over 4.5 times, adds the firm. Citi believes these disclosures "set the record straight that the degree of fraudulent activity on the platform is not as widespread as the short-seller report suggested, at least as of now." It keeps a Buy rating on the shares with a $90 price target.