The mobile payments company is one of Silicon Valley's hottest start-ups, raising $200 million late last year in a funding round that valued the company at $3.25 billion. Rabois, a former executive at eBay Inc's PayPal who has a law degree from Harvard Law School, joined Square in 2010.
In August, Starbucks announced a deal to use Square's technology to process debit and credit card payments at the coffee chain's stores. Starbucks CEO Howard Schultz is a Square board member.
"We took these allegations very seriously and we immediately launched a full investigation to ascertain the facts," Square spokesman Ricardo Reyes said in a statement.
The company, which retained San Francisco lawyer Richard Curiale to conduct an internal investigation into the matter, said it has not found any evidence to support any of the claims, but added, "Keith exercised poor judgment that ultimately undermined his ability to remain an effective leader at Square."
Rabois said in his blog on Friday that the recent events were "the toughest, saddest, most frightening, and emotionally draining of my life."
This followed his simple resignation statement the day before.
Rabois shot to prominence in tech circles in the early 2000s, when he served as a top executive at PayPal. Now a director of Yelp Inc, Rabois is a member of the "PayPal Mafia," the Silicon Valley nickname for the circle of influential PayPal alumni.
DJ Patil, a data scientist at venture capital firm Greylock Partners and a former executive at LinkedIn, where Rabois once worked, tweeted: "While I may not see eye-to-eye (with) @rabois on everything. I'm fully on his side on this 1. He's always held himself to the highest standard."
Pao tweeted on Friday: "The ultimate measure of a man is ... where he stands at times of challenge and controversy - MLK keithrabois.tumblr.com/post/414631892 @rabois."
The Wall Street Journal first reported the sexual harassment accusations against Rabois on Friday.
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