Federal prosecutors investigate Jack Dorsey’s Block Inc. and affiliates amid suspicions of facilitating transactions for terrorist groups.
A compelling implication exists that certain affiliated platforms of Jack Dorsey’s Block may be implicated in facilitating transactions for terrorist organizations. In light of this, it has been alleged that federal prosecutors have initiated an inquiry into their internal operations.
According to a former employee of the financial technology firm founded by Jack Dorsey, who was also co-founder of Twitter, the organization has experienced protracted and pervasive compliance violations in two of its primary divisions, Square and Cash App.
Prosecutors from the Southern District of New York have thus far obtained incriminating documents from this former employee of Block.
Most of these documents presented evidence that Square and Cash App needed to have gathered adequate information from its consumers, highlighting a need for more Know-Your-Customer (KYC) protocols. This information that was bridged prevented the financial platforms from assessing the risks posed by these customers.
Furthermore, it has been claimed that Square enabled transactions on behalf of clients in nations subject to economic sanctions. A considerable proportion of these small-dollar transactions were conducted with U.S.-sanctioned nations, including Cuba, Iran, Russia, and Venezuela.
According to the information in the document, Block, which recently introduced a Bitcoin wallet, was also accused of conducting multiple digital asset transactions for terrorist organizations.
“From the ground up, everything in the compliance section was flawed,” the former employee said. “It is led by people who should not be in charge of a regulated compliance program.”
As mandated by the government, many of these transactions involving credit cards, dollar transfers, and Bitcoin were not disclosed, according to the former employee. Even after being informed of the breach, Block failed to modify its procedures.
This implies that the company’s board of directors and executive team were aware of the illicit activities on its platforms yet chose not to intervene.
Recognizing that Cash App was investigated in 2022 in response to a petition filed by the Consumer Financial Protection Bureau (CFPB) and a civil investigative demand lodged with the United States District Court for the Northern District of California is significant.
Similarly, earlier this year, two individuals reported compliance violations on the widely used trading equities and Bitcoin platform to the authorities.
