Payments company Block, which is owned by former Twitter CEO Jack Dorsey, is being sued over a security breach that leaked data on 8.2 million users.

Founded in 2009 as Square by Dorsey, along with businessman Jim McKelvey, Block provides a payment platform for small and medium businesses. It also offers a variety of other services, including payment transfers, web hosting and audio-streaming.

The class action lawsuit in the US accuses the company of “negligent” security practices. This resulted in a December 2021 breach of Cash App Investing, where an ex-employee was able to access company reports.

According to the lawsuit, poor security practices at the company allowed the employee to steal the data. This included users’ full names and the account numbers associated with their investing activities.

This meant that some customers also had the value, activity and contents of their portfolios leaked.

In addition, the lawsuit claims that the data breach led to in users being subject to fraudulent activities.

One plaintiff, Michelle Salinas, claims to have suffered multiple fraudulent transactions on her Cash App account, and had not been reimbursed by Block.

The lawsuit also notes a four-month delay between the breach and Block reporting it in April 2021.

“Block offered no explanation for the four-month delay between the initial discovery of the breach and the belated notification to affected customers, which resulted in plaintiffs and class members suffering harm they otherwise could have avoided had a timely disclosure been made,” the suit said.

The lawsuit comes at the same time as allegations against Jack Dorsey from his former security chief at Twitter.

Peiter Zatko has said that Dorsey, in his last year at the social media company, suffered a “drastic loss of focus,” and accusing Twitter of security failures.

Recommended

• Comment | It’s time for IT to increase the scope carbon reporting
• Cloud computing firm iomart appoints new chair
• Government offers grants to upskill Scots workforce

His whistle-blower comments, addressed to the Securities and Exchange Commission, Federal Trade Commission, and Department of Justice and published by the Washington Post, claimed that he frequently didn’t attend meetings and seemed disengaged when he did.

Zatko was hired by Twitter in 2020 in the wake of a breach that saw hackers access several celebrity accounts. He was later fired by the company in January 2022, “for ineffective leadership and poor performance,” according to a Twitter spokesperson.

The company previously suffered a fall in its share price. Although its profits were up 29% year on year, they fell just shy of expectations.

This was, in part, due to falling Bitcoin prices. Its payment transfer service, Cash App, allows users to transfer Bitcoin. Despite making the cryptocurrency a major part of Block’s strategy, the company saw its Bitcoin revenue fall 34% year on year, and only brought in $41m of profit.

Get the latest news from DIGIT direct to your inbox

Our newsletter covers the latest technology and IT news from Scotland and beyond, as well as in-depth features and exclusive interviews with leading figures and rising stars.

To subscribe, click here.