- A former Block employee allegedly gave documents to prosecutors
- The records revealed many small-dollar dealings with organizations of sanctioned nations.
Reports indicate that US federal authorities are looking into Block, Inc., Jack Dorsey’s fintech startup, after the disclosure of papers by a whistleblower that claimed the company’s payment divisions, Square and Cash App, were involved in extensive and persistent compliance breaches.
According to NBC News’ May 1 report, a former Block employee allegedly gave documents to prosecutors from the Southern District of New York that showed how Square and Cash App handled thousands of transactions for users in nations hit hard by economic sanctions, as well as cryptocurrency transactions for terrorist organizations.
Violations of Compliance
Moreover, the records, which NBC News obtained in a scant 100 pages, revealed many small-dollar dealings with organizations from nations hit hard by US economic sanctions, including Cuba, Venezuela, Iran, and Russia.
Furthermore, according to the whistleblower, the government was not informed about the majority of the transactions discussed with prosecutors, which included transactions using credit card, fiat currency, and Bitcoin (BTC).
Also, the former worker said that after being notified of the purported violations of compliance, Block did nothing to fix its procedures. To back up the whistleblowers’ claims, NBC News was informed by a second anonymous source who had “direct knowledge” of Block’s internal procedures.
It was his belief from the records that compliance infractions were “known to Block leadership and the board in recent years,” according to Edward Siedle, the whistleblower’s lawyer and a former SEC lawyer.
According to NBC News’ interview with a representative from Block, the company has a “responsible and extensive” compliance policy that is continually adjusted to address new risks and changes in the legislative landscape around sanctions.
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