Jack Dorsey’s Block’s Crypto Unit Under Investigation Over Compliance Practices: Report
Federal prosecutors have launched an investigation into Block, the financial technology company co-founded by Twitter’s Jack Dorsey. The investigation focuses on alleged compliance lapses at its central units, Square and Cash App.
Sources with direct knowledge of the matter revealed that discussions with a former employee have undisclosed documents highlighting various shortcomings in compliance practices, as reported by NBC News on Wednesday .
Federal prosecutors are digging into internal practices at Block, which owns Cash App and Square.
An ex-employee claims Block processed crypto transactions for terrorist groups and Square processed transactions involving nations subject to sanctions. https://t.co/v5KNboKywz
— NBC News (@NBCNews) May 1, 2024
The allegations against Block include inadequate customer information collection, processing transactions involving countries under U.S. sanctions, and facilitating cryptocurrency transactions for terrorist groups. The revelations suggest a significant regulatory challenge for Block, with the former employee alleging that thousands of transactions were not reported to the government as required.
“From the ground up, everything in the compliance section was flawed; it is led by people who should not be in charge of a regulated compliance program,” the former employee told NBC News.
Despite being alerted to these breaches, Block purportedly failed to rectify its processes, according to information shared with prosecutors. The Southern District of New York, where the investigation is taking place, declined to comment on the matter. The compliance issues extend to Block’s Square unit, where instances of insufficient due diligence on international merchant sellers and
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