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Whistleblower Reveals Alleged Compliance Lapses in Sanctions, Terrorism Financing at Block



compliance

Federal prosecutors are investigating internal practices at Block, the financial technology firm founded by Twitter co-founder Jack Dorsey, according to a report from NBC. A former employee has provided documents to prosecutors from the Southern District of New York, alleging that Block's two main units, Square and Cash App, have faced years of compliance lapses.


The former employee claims that Block has failed to collect sufficient information from customers to assess their risks, has processed thousands of transactions involving sanctioned countries, and has even processed multiple cryptocurrency transactions for terrorist groups. Most of these transactions were allegedly not reported to the government as required, and Block did not address the breaches when alerted to them.


Key Points:

  • Prosecutors are investigating compliance issues at Block, the fintech company founded by Jack Dorsey.

  • A former employee has provided documents to prosecutors, alleging widespread and long-standing compliance failures at Square and Cash App.

  • The former employee claims that Block has failed to collect adequate customer information, processed transactions with sanctioned countries, and even facilitated cryptocurrency transactions for terrorist groups.

  • Most of these transactions were allegedly not reported to the government as required, and Block did not address the breaches when alerted to them.

  • A second person with direct knowledge of Block's monitoring programs and practices echoed the former employee's assessment of the company's compliance issues.


The allegations made by the former Block employee paint a concerning picture of a fintech giant struggling to maintain the integrity of its compliance practices. If the claims are substantiated, it could have serious implications for Block's reputation, regulatory standing, and customer trust.


The company's response, acknowledging the need to "continually improve the safety and security of our ecosystem," suggests an awareness of the gravity of the situation. As the investigation unfolds, the fintech industry and the public will be watching closely to see how Block addresses these alleged compliance lapses and works to regain confidence in its operations.

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