American prosecutors are investigating the financial transactions at Jack Dorsey's Block, the parent company of Cash App and Square, which is founded by Twitter.
The prosecutors are reportedly investigating Block's internal procedures and speaking with a former employee about the purportedly pervasive and compliance problems at Cash App and Square, according to an NBC article that quotes two individuals with firsthand knowledge of the situation.
Documents that the former employee of Dorsey's company gave to the Southern District of New York prosecutors demonstrate that consumers of Cash App and Square were not required to submit enough information to evaluate their risks.
According to the records, Square was able to conduct hundreds of transactions involving countries that the US had imposed economic sanctions on. Documents also reveal that the company handled business for various terrorist organizations.
"Everything in the compliance section was flawed from the ground up," the ex-employee stated.
"It is run by individuals who have no business running a program for regulated compliance."
The lengthy dossier, more than 100 pages long, details several transactions in even dollar amounts being handled in nations including Cuba, Iran, Venezuela, and Russia that are subject to US sanctions. Former attorney for the Securities and Exchange Commission (SEC), Edward Siedle, stated:
"My understanding from the documents is that the board and Block leadership were aware of compliance lapses in recent years."
The ex-employee also pointed out that the majority of the transactions—whether using credit cards, US dollars, or Bitcoin (BTC)—were never duly reported to the authorities. The employee further stated that the business neglected to modify its operational procedures after Block was informed of breaches.
May 2024, Cryptoniteuae