🔍 Federal Prosecutors Investigate Compliance Lapses at Block | Federal prosecutors are examining internal practices at Block, the financial technology firm founded by Twitter co-founder Jack Dorsey, regarding alleged compliance lapses at its subsidiaries, Square and Cash App.
💼 Allegations of Compliance Lapses | A former employee provided documents to prosecutors, indicating insufficient information collection from customers, thousands of transactions involving sanctioned countries, and crypto transactions for terrorist groups.
📑 Unreported Transactions | Most transactions, including credit card transactions, dollar transfers, and Bitcoin, were not reported to the government as required. Block allegedly failed to correct processes despite being alerted to breaches.
🌍 Transactions Involving Sanctioned Countries | Documents reveal transactions with entities in sanctioned countries such as Cuba, Iran, Russia, and Venezuela, continuing until last year.
🔍 Criticism of Compliance Program | The former employee criticized Block's compliance program, alleging flaws and inadequate leadership.
💬 Expert Assessment | Edward Siedle, a former SEC lawyer representing the whistleblower, stated that compliance lapses were known to Block leadership and the board.
🗂️ Probe Response | Block responded, stating it has a comprehensive compliance program and adapts practices to meet regulatory requirements. The company reaffirmed its commitment to improving safety and security.
The Southern District of New York declined to comment on the ongoing investigation.
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