Crypto Analyzer

Jack Dorsey’s Block faces scrutiny from federal authorities over non-compliant crypto services: NBC News

**Federal Authorities Investigating Block Over Crypto Compliance Concerns**

Recent reports from NBC News have shed light on the scrutiny faced by Block, a crypto unit founded by Twitter co-creator Jack Dorsey, from federal authorities. The investigation, which involves collaboration with whistleblowers, is centered around Block’s compliance practices regarding cryptocurrency transactions.

According to sources cited in the NBC News report, Block is under fire for allegedly processing crypto transactions that are connected to sanctioned countries and terrorist organizations. The company’s lax compliance practices, as highlighted in the investigation, are described as part of a broader pattern of compliance lapses affecting Block’s Square and Cash App units.

A former Block employee quoted in the report described significant shortcomings in the company’s compliance infrastructure, suggesting that numerous questionable transactions went unreported to the U.S. Office of Foreign Assets Control (OFAC), the entity responsible for enforcing economic sanctions.

Evidence provided to NBC News by ex-employees includes internal documents detailing exchanges between Block and sanctioned countries like Russia and Iran, which reportedly occurred as recently as last year. The records suggest that despite being aware of abuses of its services by sanctioned entities, Block continued to facilitate transactions involving these parties.

In response to the allegations, Block maintained that it had not knowingly violated international sanctions. The fintech firm, however, chose not to directly address specific questions regarding its compliance failures, stating that its in-house legal team, external counsel, and consultants are advising on the matter and working on appropriate remediation strategies. The company also emphasized that it conducts regular sanctions screening for all its merchants.

As the investigation unfolds, the situation underscores the importance of robust compliance measures within the cryptocurrency industry. The regulatory landscape for digital assets continues to evolve, and companies like Block are facing increasing scrutiny to ensure adherence to legal and ethical standards in their operations.

It is essential for companies operating in the crypto space to prioritize compliance, transparency, and accountability to maintain the trust of regulators, customers, and the broader financial ecosystem. The outcome of the federal investigation into Block’s practices will likely have implications for the entire industry, emphasizing the need for stringent compliance frameworks in the fast-growing world of digital finance.