NBC News reported Wednesday that U.S. prosecutors are investigating financial transactions on the Jack Dorsey block, citing two people with direct knowledge of the matter.
NBC reported Federal prosecutors said they were in talks with former employees who were accused of widespread compliance violations at the company’s two major divisions, Square and Cash App.
Areas under investigation include whether the company failed to collect enough information about its customers to assess risk, whether Square processed transactions involving countries subject to economic sanctions, and whether Block identified terrorist groups. This includes information such as whether or not the company handled virtual currency transactions.
The company’s stock price last fell 8.8%.
A Block spokesperson said the company has a “responsible and extensive compliance program” and regularly adapts its practices to respond to “emerging threats and the evolving sanctions regulatory environment.” Ta.
“Continuously improving the safety and security of our ecosystem is a top priority for Block. We not only continue to invest heavily in our compliance program, but we are also committed to building on this effort. This is what we have always done and continue to do,” the spokesperson said.
A spokesperson for the Southern District of New York declined to comment.
NBC reported that former employees said the company did not act on violations even after being warned, and that most of the transactions under investigation were not reported to the government as required.
Some of the deals involved sanctioned countries such as Cuba, Iran, Russia and Venezuela and dated back to last year.
