America Investigates Jack Dorsey’s Block, Inc. on Financial Transactions: Report

US federal prosecutors are reportedly investigating Jack Dorsey's fintech firm Block Inc.

A former Bloc employee provided prosecutors from the Southern District of New York with documents showing he handled thousands of transactions for users in countries under economic sanctions and also made crypto transfers to terrorist groups, NBC News reported on May 1.

About 100 pages of the documents, released to NBC News, show that many of the transactions involve entities in countries under US economic sanctions, including Iran, Russia, Cuba and Venezuela.

The informant said many of the transactions discussed with prosecutors — credit card, fiat and bitcoin (BTC) transactions — were not reported to the government.

Block doesn't adjust its procedures when it issues warnings for compliance violations, the former employee said.

“From the basics, everything in the compliance department is flawed,” he said.

“A controlled compliance program is run by people who shouldn't be in charge.”

A second anonymous source with “direct knowledge” of Block's internal systems also confirmed the hackers' allegations to NBC News.

Edward Siedle — a former Securities and Exchange Commission attorney representing the attorney — said it was clear from the filings that compliance violations were “known to management and the board in recent years.”

A spokesperson for Block told NBC News that the firm had a “responsible and extensive” compliance program that was regularly adapted to meet “risks and the evolving sanctions regulatory environment.”

Related: Jack Dorsey's Block Announces Development of ‘Full Bitcoin Mining System'

By Block, Inc. The investigation reported on is leading to broader legal action against cryptocurrency companies in the United States.

Binance founder Changpeng Zhao was sentenced to four months in prison on April 30 after pleading guilty earlier to failing to legally maintain an anti-counterfeiting program.

On April 24, the founders of crypto mixer and Bitcoin wallet Samurai wallet were arrested on charges of money laundering. The couple later pleaded not guilty in court and were released on $1 million bond.

On April 25, Ethereum development company Consensus filed a lawsuit against the SEC, alleging that the regulator has orchestrated a campaign to “manipulate the future of cryptocurrency” by considering Ether (ETH) as a security.

Consensys said it received Wells' notice from the SEC on April 10, which usually precedes enforcement action.

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