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Investigation Launched into Block, the Jack Dorsey-owned Company, for Alleged Compliance Lapses
Amidst a seemingly intensified regulatory crackdown on the cryptocurrency industry by American authorities, reports have emerged claiming that U.S. prosecutors are delving into Block, the company co-founded by Jack Dorsey, known for its popular platforms Square and Cash App.
According to a recent article by NBC News, federal prosecutors are scrutinizing the internal operations of Block, with a specific focus on its cryptocurrency-related activities. The investigation is said to be based on information provided by a former employee familiar with potential compliance shortcomings at the company.
Alleged Compliance Lapses and Potential Violations
The probe reportedly centers around accusations of “widespread and yearslong compliance lapses” within the organization. One of the most serious allegations suggests that Block may have facilitated cryptocurrency transactions for entities linked to terrorist activities. Moreover, the company is said to have processed “thousands of transactions” originating from countries under strict economic sanctions, such as Iran, Russia, Cuba, and Venezuela.
It is claimed that despite being alerted to these compliance issues, Block allegedly failed to take appropriate remedial actions or report the suspicious transactions to the relevant authorities. This includes transactions involving popular cryptocurrencies like Bitcoin.
Response from Block
In response to the allegations and the ongoing investigation, Block provided a statement to NBC News, asserting the following:
“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. Continually improving the safety and security of our ecosystem is a top priority for Block. We have been and remain committed to building upon this work, as well as continuing to invest significantly in our compliance program.”
As of now, Block has yet to publicly address the allegations beyond the statement provided to the media outlet. The company has not responded to requests for comment from Decrypt.
The ongoing investigation into Block underscores the increased scrutiny faced by cryptocurrency-related entities in the United States, with regulators and law enforcement agencies intensifying their efforts to ensure compliance with existing regulations and prevent illicit activities within the industry.
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