Block (NASDAQ:SQ), founded by Twitter (X) creator Jack Dorsey, is being scrutinized by federal prosecutors for allegedly facilitating illicit transactions. The report was first covered by NBC.com.
Blcok operates the popular e-commerce platform Square as well as the P2P transfers platform CashApp.
According to the report, prosecutors in the Southern District of New York are reviewing “yearslong compliance lapses” having to do with transactions allegedly involving crypto and terrorist groups.
A former employee told NBC, “From the ground up, everything in the compliance section was flawed. It is led by people who should not be in charge of a regulated compliance program.”
The report states that about 100 pages of documents were shared with the news company to validate the claims.
Block and its CashApp have been the subject of rumors in the past that the service has been used for illicit activities.
In March of 2023, short-seller Hindenburg Research issued a report that claimed Block had facilitated fraud against consumers and its Cash App was used by criminals. Additionally, the report claimed that the company ignored internal employee concerns, having received warnings from the Secret Service, FinCEN, State Regulators, and more.
Block earnings are due today and should shed some light on these reports of an investigation.
