Monness Crespi thinks the report of whistleblowers raising concerns about Block’s Cash App is “somewhat concerning,” but argues that Cash App has already faced similar questions on true user counts and duplication stemming from a short report in March of last year. The firm thinks that the know your customer, or KYC, element of onboarding likely makes it so there is a compliant ongoing monitoring process and on the question of ongoing anti-money laundering, or AML, questions the analyst is “hard pressed to believe that, given Cash App’s visibility into customers as part of onboarding/know your customer, the same platform would then shun the AML side of the compliance equation.” The firm maintains a Buy rating and $85 price target on Block shares.
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