Federal prosecutors are closely examining Block’s cryptocurrency division, Square and Cash App, by collaborating with informants to look into the business’s compliance procedures.
The company that Jack Dorsey co-founded allegedly facilitated cryptocurrency transactions connected to terrorist groups and sanctioned nations because of insufficient checks, and sources.
Yet according to the publication, Block’s Square and Cash App divisions have “widespread and yearslong compliance lapses” that go much deeper than its purportedly lenient cryptocurrency policies.
A former employee of Block is cited that “thousands” of dubious transactions went unreported to the U.S. Office of Foreign Assets Control, or OFAC, which imposes economic penalties. “From the ground up, everything in the compliance section was flawed,” the employee claims.
More than 100 pages of allegedly internal firm data, including details of correspondence between the Block and sanctioned nations including Russia and Iran as recently as last year, were sent by ex-employees to the journal.
The correspondence trail supports allegations that Block carried on enabling transactions with sanctioned organizations even after it learned about their improper use of its services. Block insisted that it did not intentionally break any international restrictions.
Block the firm claimed in a statement that it already regularly screens all of its merchants for sanctions and that its in-house legal team, outside lawyers, and consultants are “advis[ing] on the issue and appropriate remediation.”
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