“Twitter Founder’s Fintech Company, Block, Accused by Former Employee of Processing Transactions for a Terrorist Organization! US Department of Justice Launches Investigation”

"Twitter Founder's Fintech Company, Block, Accused by Former Employee of Processing Transactions for a Terrorist Organization! US Department of Justice Launches Investigation"

"Twitter Founder's Fintech Company, Block, Accused by Former Employee of Processing Transactions for a Terrorist Organization! US Department of Justice Launches Investigation"

According to a report by NBC News, a former employee of Block has provided a series of documents to the Southern District of New York prosecutors. These documents cover thousands of transactions processed by Square and Cash App for users from countries under economic sanctions, as well as evidence of cryptocurrency transactions processed for terrorist organizations.

Approximately 100 pages of documents were provided to NBC News, and the report indicates that the entities involved in countries sanctioned by the United States include Iran, Russia, Cuba, and Venezuela. However, most of the transactions are small in amount. The whistleblower, a former employee, pointed out that most of these transactions involving credit cards, fiat currency, and bitcoin were not reported to the government.

In addition, the former employee also revealed that when Block was informed of these compliance issues, the company did not make any corrections to its processes. The whistleblower stated that a second anonymous source familiar with Block’s internal systems also confirmed the whistleblower’s accusations to NBC News. Edward Siedle, a former Securities and Exchange Commission lawyer representing the whistleblower, stated that based on his understanding from the documents, these compliance issues have been known to Block’s leadership and board of directors in recent years, but no improvements have been made to address these issues.

In response to this, a spokesperson for Block told NBC News that the company has a “responsible and comprehensive” compliance program, which is regularly adjusted to address “emerging threats and evolving sanctions regulatory environment”.

This investigation into Block is part of a series of enforcement actions by US regulatory agencies against cryptocurrency companies. Previously, Binance founder Zhao Changpeng was sentenced to four months in prison on April 30 for failing to maintain proper anti-money laundering procedures on the exchange. On April 24, the co-founders of the cryptocurrency mixer and bitcoin wallet Samourai Wallet were arrested on money laundering charges. On April 10, blockchain development company Consensys received a Wells notice from the SEC, leading Consensys to file a lawsuit against the SEC on April 25, accusing the regulatory agency of attempting to classify Ether as a security and thereby “attempting to control the future of cryptocurrency”.