The United States investigators are currently examining Jack Dorsey’s Fintech Firm Block due to illegal Crypto transactions. Whistleblower states that Dorsey’s Block proceeded with many transactions linked to terrorist groups.
Federal prosecutors in the United States are looking into Block, Inc., a company co-founded by Jack Dorsey. The investigation against the company is ongoing due to concerns about compliance violations within its payment platforms Square and Cash App.
This investigation started after the Former Block employee from the Southern District of New York provided documents to investigators, informing that Square and Cash App platforms allowed thousands of transactions from users in countries facing U.S. economic sanctions. They even processed crypto transactions for strange illicit groups. These transactions through credit cards, fiat, and Bitcoin totaled around $57,805 on 2nd May. These transactions were allegedly not reported to the government as required.
The Former Block employee of the company provided the documents claiming that Block didn't fix these compliance issues even after being alerted about them. This indicates serious problems in how the company handles regulations.
Another unnamed source familiar with Block's internal operations supported these claims. Edward Siedle, a former SEC lawyer representing the anonymous sources, said that the top executives and the board at Block were aware of these compliance problems.
However, an Attorney from Block’s side defended the company, saying they have a strong and flexible compliance program to deal with new challenges and changes in regulations, especially regarding sanctions.
This investigation into Block, Inc. is happening at a time when U.S. authorities are cracking down on cryptocurrency companies. Recently, a case came across of Binance CEO Changpeng Zhao where the founder of Binance, a major cryptocurrency exchange, was sentenced to a four-month imprisonment. Because Binance didn't maintain a proper Anti-Money Laundering program. Similarly, the founders of Samourai Wallet, a Bitcoin wallet service provider were arrested on suspicion of money laundering, although they denied the charges and were released on bail.
In another development, Gary Gensler chief of SEC believed that ETH is an unregistered security. Consensys, a company working on Ethereum blockchain technology, filed a lawsuit against the U.S. Securities and Exchange Commission (SEC). They accused the SEC of trying to control the future of cryptocurrency by targeting Ether, the cryptocurrency associated with Ethereum, as a security. This could have significant consequences for the entire cryptocurrency industry.
These legal actions against cryptocurrency companies highlight the increasing attention and scrutiny from regulators. According to Coin Gabbar, authorities are focusing more on ensuring that these companies follow rules related to preventing money laundering and complying with securities laws. These developments highlight the challenges facing companies operating in the cryptocurrency space as they navigate complex regulatory landscapes and seek to maintain compliance while innovating in a rapidly evolving industry.
Also Read: Dorsey’s Block Ventures Into Full Bitcoin Mining System
