tl;dr
Federal prosecutors are investigating financial transactions at Block, founded by Jack Dorsey, focusing on potential violations at its divisions, Cash App and Square. Allegations include processing crypto transactions for terrorist organizations and handling transactions involving US-sanctioned coun...
html
Federal prosecutors are investigating financial transactions at Block, founded by Jack Dorsey, focusing on potential violations at its divisions, Cash App and Square. Allegations include processing crypto transactions for terrorist organizations and handling transactions involving US-sanctioned countries. The inquiry was prompted by documents indicating inadequate risk assessment information and failure to report transactions involving sanctioned countries. The investigation poses potential challenges for Block's regulatory compliance and reputation.
The Southern District of New York’s inquiry began after an ex-employee provided documents revealing that Square and Cash App failed to collect adequate information for risk assessment. The employee claimed that despite being aware, Block did not report numerous transactions involving sanctioned countries to the government as required.
These allegations come at a time when Cash App boasts 56 million active accounts and processed transactions worth $248 billion last year alone. The platform is popular for its instant money transfer service and ability to purchase Bitcoin and stocks. Despite its success, Cash App’s design might contribute to compliance risks. Balances are typically depleted before any review can occur, limiting sanctions enforcement’s effectiveness. For this reason, the former employee argued that the compliance lapses were well-known within Block’s leadership circles, including Jack Dorsey.
“Block has a responsible and extensive compliance program and we regularly adapt our practices to meet emerging threats and an evolving sanctions regulatory environment. Our compliance program includes systems, tools, and processes for sanctions screening, as well as investigating and reporting on sanctions issues in accordance with our regulatory obligations,” a Block spokesperson stated.
The potential fallout of this investigation could be significant for Jack Dorsey’s Block as it navigates regulatory challenges and seeks to maintain its reputation. This scrutiny coincides with the resignation of two key board members, intensifying the spotlight on Block’s governance and compliance practices.
Disclaimer: The opinions expressed by the writers at Grow My Bag are their own and do not reflect the official stance of Grow My Bag. The content provided on our site is not intended as investment advice, and Grow My Bag is not an investment advisor. We do not endorse buying or selling any cryptocurrencies or digital assets mentioned in our articles. High-risk investments in Bitcoin, cryptocurrencies, and digital assets require thorough due diligence, and all transfers and trades made are at your own risk. Grow My Bag is not responsible for any potential losses and participates in affiliate marketing.