Prosecutors Digging Into Financial Transactions at Block

Prosecutors in the United States are looking into the financial transactions at Twitter founder Jack Dorsey’s Block, the parent firm of Cash App and Square.

As per a NBC report, citing two people with direct knowledge of the matter, the prosecutors are looking into the internal practices at Block and discussing with a former employee the alleged widespread and compliance issues at Cash App and Square.

The former employee at Dorsey’s company provided documents to the prosecutors in the Southern District of New York, which show that Cash App and Square customers were not asked to share sufficient information to assess their risks.

The documents also reveal that Square successfully processed thousands of transactions that involved nations subjected to economic sanctions by the United States. Further, the documents also show that the firm processed transactions for certain terrorist groups.

The former employee said that “from the ground up, everything in the compliance section was flawed,” while adding:

“It is led by people who should not be in charge of a regulated compliance program.”

The document spanning over 100 pages shows many transactions, in even dollar amounts, being processed in countries under US sanctions like Cuba, Iran, Russia, and Venezuela. Former Securities and Exchange Commission (SEC) lawyer, Edward Siedle, said:

“It’s my understanding from the documents that compliance lapses were known to Block leadership and the board in recent years.”

The former employee also noted that most of the transactions, including credit cards, US dollars, or Bitcoin (BTC), were never reported to the authorities as required. When Block was alerted to breaches, the company failed to correct its operating methods, the employee added.