Federal prosecutors in the United States are reportedly investigating a fintech company called Block, Inc., which is owned by Jack Dorsey. The investigation was initiated after a whistleblower leaked documents revealing extensive compliance violations at the company’s payment subsidiaries, Square and Cash App. According to sources familiar with the matter, the documents indicate that the company processed cryptocurrency transactions linked to sanctioned countries and terrorist organizations due to inadequate checks.
Former employees provided NBC News with approximately 100 pages of documents detailing transactions involving entities in countries subject to U.S. sanctions, such as Cuba, Iran, Russia, and Venezuela. The majority of these transactions involved small amounts of money. The documents also suggest that Block continued to facilitate transactions involving sanctioned entities even after becoming aware of their misuse of its services.
Edward Siedle, a former Securities and Exchange Commission attorney representing the whistleblower, stated that the documents indicate that compliance violations were known to Block’s leadership and board in recent years. In response to these claims, a Block spokeswoman emphasized the company’s commitment to upholding strong compliance procedures and modifying them to address new risks and regulatory frameworks.
The investigation into Block, Inc. comes at a time when there is an increasing crackdown on crypto companies in the United States. Binance founder Changpeng Zhao recently received a prison sentence for failing to maintain a legally compliant anti-money laundering program at the cryptocurrency exchange. The co-founders of Samourai Wallet were also arrested on money laundering charges, while Consensys, an Ethereum development firm, filed a lawsuit accusing the SEC of attempting to control the future of crypto through enforcement actions. Consensys disclosed that it had received a Wells notice from the SEC, which often precedes enforcement proceedings.
