- Block is under federal investigation for failure to follow compliance practices.
- Information against the crypto company was leaked by whistle-blowers who are former employees.
- Block executives say the company did not knowingly break compliance laws.
According to a report from NBC on Wednesday, former Twitter CEO Jack Dorsey’s company, Block, is under investigation by the US federal government. The allegations against the company are charges of processing transactions linked to sanctioned countries and even terrorists. The report stated that the company’s crypto unit failed to adhere to US compliance practices.
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Block accused of processing terrorist-linked transactions
On Wednesday, NBC reported, citing two sources familiar with the inquiry, that federal prosecutors had been investigating Block’s internal operations, including its cryptocurrency business.
The report also claims that Block allegedly partook in cryptocurrency transactions from US-sanctioned countries such as Russia, Iran, Cuba, and Venezuela.
The accusations against the company were strengthened by information leaked by former Block employees whistle-blowers. According to NBC, they provided evidence with documents suggesting continuous involvement in these transactions even after the company had become aware of the violations.
The whistle-blowers also claim that Block has not been reporting various transactions with sanctioned entities and that Cash App hid transactional data as criminal activities thrived on its platform.
The company had formerly been under investigation earlier in the year, and its Cash App service was also under investigation sometime in 2022 for fraudulent actions.
Also read: US intensifies battle against crypto privacy protocols following crackdown on Samourai Wallet
Block executives replied to the various allegations, stating that the company did not knowingly break compliance laws. They claimed that the company conducts regular audits on all merchants, even though the evidence provided proves that the company had been alerted several times yet refused to adjust its processes, according to the report.
The investigation comes off the back of Block announcing the development of a full Bitcoin mining system in an April 23 blog post.
