Federal prosecutors are scrutinizing Block's crypto division and are working with a whistleblower to investigate the company's compliance practices, two sources familiar with the matter told NBC News on Wednesday.
The company founded by Twitter co-founder Jack Dorsey is suspected of processing cryptocurrency transactions linked to sanctioned countries and terrorist organizations because of insufficient checks, sources say on NBC News. told. But the company's allegedly lax cryptocurrency practices are just one part of “widespread and long-standing compliance violations” at Block's Square and Cash App divisions, the magazine reported.
“Everything in the compliance department was fundamentally flawed,” a former Block official told NBC News, reportedly claiming that “thousands” of suspicious transactions went unreported. The U.S. Office of Foreign Assets Control (OFAC) enforces economic sanctions.
Former employees provided the magazine with more than 100 pages of what they described as internal documents from their former companies, including records of communications between the bloc and sanctioned countries such as Russia and Iran from last year. The communications underscore allegations that the block continued to facilitate transactions involving sanctioned entities long after it became aware of the misuse of its services.
However, Bullock's statement to NBC insisted that he had not intentionally violated international sanctions.
The fintech company declined to directly answer NBC's questions about some compliance violations. But Block said in a statement that its in-house legal team, outside lawyers and consultants are “advisory.”[ing] regarding this issue and appropriate remediation,'' he said, adding that it already conducts regular sanctions inspections on all merchants.
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