Report: US Investigating Block Inc’s Financial Transactions Involving Jack Dorsey

The United States federal prosecutors are currently investigating Block Inc, the fintech company owned by Jack Dorsey, following claims made by a whistleblower about widespread compliance violations within the firm’s payment services, Square and Cash App. According to documents provided by a former employee to prosecutors in the Southern District of New York, Square and Cash App processed numerous transactions for users in countries that are subject to economic sanctions, as well as crypto transactions for terrorist groups. NBC News received approximately 100 pages of these documents, which revealed that many transactions involved small amounts of money and were connected to entities in countries like Iran, Russia, Cuba, and Venezuela, all of which are under US sanctions. The whistleblower alleged that the majority of these transactions, which included credit card, fiat, and Bitcoin transactions, were not reported to the government. The former employee also claimed that when Block was informed about these compliance breaches, they did not take corrective measures. Another anonymous source, who had direct knowledge of Block’s internal systems, corroborated the whistleblower’s claims. Edward Siedle, a former lawyer for the Securities and Exchange Commission and representative for the whistleblower, stated that based on the documents, it was evident that Block’s leadership and board were aware of the compliance breaches. In response to these allegations, a Block spokesperson told NBC News that the company maintained a comprehensive compliance program that was regularly adjusted to address emerging threats and changes in sanctions regulations. This investigation into Block comes at a time when there is a growing number of legal actions being taken against cryptocurrency firms in the US. For instance, Binance founder Changpeng Zhao was recently sentenced to four months in prison after admitting to failing to maintain a legally compliant Anti-Money Laundering program at the exchange. Additionally, the co-founders of Samourai Wallet, a crypto mixer and Bitcoin wallet, were arrested on money laundering charges, although they pleaded not guilty in court and were released on a $1-million bond. Furthermore, on April 25, Ethereum development firm Consensys filed a lawsuit against the SEC, accusing the regulator of attempting to gain control over the future of cryptocurrency through enforcement actions that aimed to classify Ether as a security. Consensys stated that they had received a Wells notice from the SEC, which often precedes an enforcement action.