US Federal Prosecutors Investigate Block Inc. for Compliance Violations

Block
Inc.,
the
financial
technology
firm
that
was
established
by
Jack
Dorsey,
is
the
subject
of
an
investigation
by
federal
authorities
in
the
United
States;
the
inquiry
is
based
on
allegations
of
compliance
breaches
at
the
company’s
payment
units,
Square
and
Cash
App.
The
company’s
role
in
processing
transactions
for
customers
in
countries
that
are
subject
to
economic
sanctions
and
in
enabling
cryptocurrency
transactions
for
terrorist
organisations
was
brought
to
light
by
a
whistleblower
who
revealed
papers
outlining
the
company’s
engagement
in
these
activities.

There
have
been
allegations
of
violations
of
compliance.
The
whistleblower
claims
that
Block
Inc.
executed
thousands
of
transactions
for
customers
located
in
countries
that
are
subject
to
economic
sanctions,
such
as
Iran
and
North
Korea.
The
company’s
compliance
methods
were
called
into
question
as
a
result
of
these
transactions,
which
were
in
violation
of
US
rules.
In
addition,
the
records
disclosed
that
Block
acted
as
a
facilitator
for
bitcoin
transactions
for
terrorist
organisations,
which
further
highlights
the
possibility
for
compliance
violations.

According
to
the
allegations
presented
by
the
whistleblower,
Block
Inc.
was
made
aware
of
the
compliance
breaches
that
occurred,
but
the
company
did
not
take
the
necessary
steps
to
fix
the
problem.
The
corporation
continued
to
execute
transactions
for
sanctioned
persons
and
companies,
as
well
as
terrorist
groups,
despite
the
fact
that
it
was
made
aware
of
the
breaches.
As
a
result
of
this
inability
to
resolve
the
compliance
problems,
substantial
concerns
have
been
raised,
which
has
led
to
the
investigation
being
conducted
by
federal
prosecutors.

Implications
and
Possible
Consequences
The
inquiry
into
the
compliance
infractions
committed
by
Block
Inc.
may
have
substantial
repercussions
for
the
corporation.
Block
might
be
subject
to
various
legal
consequences,
including
large
fines,
if
he
is
proven
guilty.
Furthermore,
the
company’s
reputation
and
the
faith
that
its
users
have
in
it
might
be
seriously
affected,
which
could
result
in
a
loss
of
consumers
and
possibilities
for
revenue.

Image
source:
Shutterstock

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