Block is under compliance investigation for allegedly processing transactions for sanctioned countries and terrorist organizations

Odaily News Block, a fintech company owned by Twitter (now renamed X) co-founder Jack Dorsey, is under a compliance investigation by federal prosecutors, according to people familiar with the matter. Internal documents provided by a former employee to prosecutors in the Southern District of New York show that Block's Square and Cash App businesses have long-term and widespread compliance deficiencies. These issues include: insufficient collection of customer information to assess risks; Square processed thousands of transactions involving economically sanctioned countries; Block processed multiple cryptocurrency transactions for terrorist organizations; most suspicious transactions involving credit cards, US dollar transfers and Bitcoin were not reported to the government truthfully. When Block received an alert for the violation, the company did not correct its corporate processes. Documents show that transactions that occurred last year involved entities in countries subject to US economic sanctions (Cuba, Iran, Russia and Venezuela), many of which were small in amount. When asked about the investigation, a Block spokesperson issued the following statement: "Block has a responsible and extensive compliance program, and we regularly adapt our practices to address emerging threats and the evolving sanctions regulatory environment. Our compliance program includes systems, tools, and processes for sanctions screening, as well as investigating and reporting sanctions issues in accordance with our regulatory obligations. Continuously improving the security of our ecosystem is a top priority for Block. We have been and remain committed to building on this work and continuing to invest significantly in our compliance program." (NBC)