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The Case Study of Cash App Data Breach Geraldine Arandid Professor Chun-Lung Huang MIS 320-001 May 5, 2023 1

Cash App The simplest way to transfer, spend, save, and invest money is with the Cash App. When the Cash App was introduced in 2013, it offered consumers a practical way to transfer and receive money without using a bank or wire service. Since then, it has broadened its range and currently offers other services including Cash App-connected debit cards, direct deposit assistance, and an investing platform. To compete with mobile payment applications like Venmo and PayPal, Block, Inc., previously Square, Inc., also introduced the app in 2013. At the time, it was initially known as Square Cash. Cash App has its customization of debit cards. Cash App is the US’s top financial app. According to AppMagic estimates, it has had more than 36 million so far this year which is across the App Store and Google Play. Customers may also take advantage of cashback deals from establishments including McDonald’s, Walgreens, Walmart, and Whole Foods (Freitas, 2022). Customers can pay other users who have linked a bank account, credit card, or debit card, or request money from them via the platform. Although Cash App doesn’t have access to transfer the balance to the prepaid card, it can use to add money to Cash App. Through partner banks, the Federal Deposit Insurance Corporation insures the remaining balance in your account. Cash App Investing LLC, a broker-dealer registered with the Securities and Exchange Commission and a participant in the Financial Industry Regulation Authority, offers investing services. In addition, the users of the investing tool can invest as little as $1 in equities. This is accomplished by purchasing a fractional share---a small component of a stock. Through the app, users can also buy, sell, or transfer Bitcoin. Users also may file their taxes for free with Cash App Taxes which used to be Credit Karma Tax. It is gradually becoming a one-stop shop for financial services. Therefore, Cash App is convenient for all customers by using their phones to pay, send, and transfers money. 2

Instruments About 8.2 million current and former customers are being contacted via Cash App’s Investing platform with information and resources related to the incident (Kost, 2023). One of the representatives of Cash App verified the data breach and mentioned that names and brokerage account numbers were among the data in the disclosed reports. It also revealed the valuation, holdings, and stock trading activity for certain investors’ brokerage portfolios for trading. According to reports, the exposed data did not contain any personally identifying data such as usernames, passwords, Social Security Numbers, credit card information, addresses, or banking information (Cybertalks, 2022). They investigated that none of the security codes, access codes, or passwords used to access Cash App accounts were impacted by the hack. In this incident, it was an insider threat attack because, after the termination of that employee, he stole all the information from the Cash App customers to hack it without asking permission, and he had the advantage for that. Even though it had a data breach, Cash App is the most popular mobile payment app in the US. It was developed by Square and has used a variety of various techniques to expand the user base and boost service acceptance. Cash App company has a strategy which is the social media marketing strategy. To drive app downloads, the business has been utilizing innovative viral and influencer marketing methods. One of these tactics is to use sportsmen and musicians in its advertisements and to work with hip-hop influencers and their followers. Cash App has also advertised its commercials on social media apps like Instagram, Twitter, YouTube, Snapchat, and Facebook. With that kind of strategy, Cash App used the 4Cs of successful brand building which are community, collaborations, content, and curation. Overall, Cash App mastered and became successful in its marketing strategy until now. 3

The Events Despite of has a lot of benefits in Cash App for all customers and banks and becoming popularity, it has some flaws or issues with that app. Cash App was likely affected and informed by the breach, and it was about 8.2 million current and former Cash App customers (Kost, 2023). The Securities Exchange Commission that Block owns the financial service company in the Cash App, Block filed a report that the employee stole and downloaded all the information without permission. These are the following information that the employee stole and downloaded: Full Name, Brokerage Account Numbers, Portfolio Values and Holdings, and Stock trading activity for one day of trading. According to the New York Times, Cowley interviewed Block, owner of the Square Cash and Cash App, about why Cash App got hacked or data breached. It happened around December 2021 and was made public when a former worker obtained business reports after quitting the job. Also, when they interviewed the company, they explained that reports were available for all employees to examine and download as part of their duties. According to Block, the unidentified person was not prevented from promptly obtaining this information after the employee stopped working for Cash App. With that incident, Block has taken this data extremely seriously and is investigating with the assistance of the appropriate law enforcement and regulatory agencies. Outcomes This incident happened in December 2021; most people think that hacking Cash App is easy. It appears that the information required to access internal documents was given to a hacker or hacking group by a former worker who is terminated or quit the company. To comply with the regulations for publicly listed firms, the company acknowledged the security breach in a filing. 4

This was done to avoid a severe public reaction should the company have tried to ignore the incident. With that, to protect confidential customers and internal information, the business may use biometric authentication in conjunction with other security measures. Following the attack, a digital forensic investigation revealed that an internal threat actor had downloaded reports containing data on Block’s Cash App users residing in the US (Steven, 2022). With the cooperation of law enforcement, a formal investigation into the data breach was carried out. In a separate statement, Block said it will keep researching technical and managerial protections to make sure clients could give the cryptocurrency corporation their sensitive personal data. Ethics Analysis Since inadequate security measures were in place, the Cash App data breach became possible. Also, a new class action complaint claims that Cash App and Block breached in December 2021 and neglected to protect the client data. According to the Cash App and Block class action, the data breach was discovered after Block revealed that one of its former employees had improperly obtained the private information of Cash App investors. Block alerted authorities to the breach and, with the aid of a reputable forensics company that must remain nameless, started an ongoing investigation into the event. It was about 8.2 million customers of Cash App were affected by the breach, and they were informed. Sadly, the delay in sending this breach notification which was sent four months after the incident increased the possibility of additional cyberattacks against the affected customers (Kost, 2023). The investigation continues when I research about Cash App data breach, which happened recently. In 2021, after he left, the employee stole all the information such as the account name, brokerage account number, portfolio values, and stock trading from 8.2 million customers of 5

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