The block is the focus of the government. Prosecutors in the Southern District of New York are reportedly investigating widespread compliance violations at Square and Cash App’s parent company. NBC News he says A former Block employee turned over documents to federal authorities, describing how the company failed to collect required risk assessment information from customers and subsequently processed illegal transactions.
The documents allegedly show Block has greenlit numerous cryptocurrency transactions involving known terrorist organizations. In addition, Square reportedly processes thousands of transfers involving nations under economic sanctions. “Everything in the compliance department was flawed, starting with the lineup,” the whistleblower allegedly said. NBC News. “It’s being led by people who are not responsible for a regulated compliance program.”
Most transactions allegedly involved credit cards, dollar transfers or Bitcoin and were not reported to the government as required by law. In addition, Block reportedly refused to “correct company processes” when notified of the violations.
Investigation a separate report from NBC News highlights two different whistleblowers reporting the same problems on the Block in February. They cited “suspicious Cash App transactions with entities sanctioned by the Treasury Department’s Office of Foreign Assets Control, transactions known to sell personal information and credit card information for illegal purposes, and offshore gambling sites prohibited to US citizens.”
The practice allegedly lasted for several years. NBC News It said it reviewed about 100 pages of whistleblower documents about people or entities in countries under US sanctions, including Russia, Iran, Venezuela and Cuba. It is reported that some of them belong to 2023.
The whistleblower claims that Block’s management is aware of the alleged violations. “It is my understanding from the documents that the compliance violations were known to Block’s management and board in recent years,” said former SEC attorney Edward Siedle, who represented the whistleblower. NBC News.
The whistleblower says that in addition to senior management, the Block’s board of directors has been informed of compliance issues. Several board members, including former U.S. Treasury Secretary Lawrence Summers, who resigned in February, and Sharon Rothstein, who is on the board through 2022, have recently made unexpected statements about whether it was a coincidence. Blok said. NBC News said they were leaving to devote more time to other activities and that their departures were not “the result of any disagreement with the company on any matter related to its operations, policies or practices.”
Federal authorities have taken more interest in modern financial platforms in recent years, at least after some of them became a thing Wild west. of course Fraud practices of FTX and subsequent collapse led to a seismic subsidence in the cryptocurrency industry. Although it’s unclear if the feds are involved, Elon Musk’s X (once a shell of Dorsey’s Twitter account) has violated US sanctions. blue check subscription payments from terrorist organizations.
