Block Faces Investor Suit Over Illicit Use of Square, Cash App

Block Inc. allegedly created “a haven for criminal and illicit activities” by failing to institute basic due diligence on its Square and Cash App payment platforms, an investor said in a proposed class action.

The lawsuit, filed in the US District Court for the Northern District of California, ties the company’s failure to properly oversee the payment platforms to a 77% drop in Block’s stock price. The lawsuit accuses the Jack Dorsey-founded company of making “materially false and misleading” statements claiming it had robust anti-money laundering measures in place.

In reality, investor Corinne Gonsalves claims, Block’s growth between ...