US Prosecutors Investigate Jack Dorsey’s Square and Cash App for Suspicious Crypto Transactions

The US federal prosecutors are scrutinising the financial operations of the cryptocurrency divisions of Jack Dorsey’s company, Block, for compliance with regulations. This was reported by NBC News, citing sources.

According to these sources, the divisions Square and Cash App are suspected of long-standing and widespread compliance procedure violations, which allegedly allowed the companies to process “thousands of transactions” from sanctioned countries and payments for terrorist groups. Authorities are questioning informants among the firm’s former employees.

Testimonies from these informants suggest that Block failed to report most suspicious financial operations involving credit cards, dollar transfers, and cryptocurrencies to the government. Even after being warned about the violations, the company did not rectify its internal processes, claims a former employee.

“From the very beginning, everything in the compliance section was flawed. It is run by people who should not be in charge of a regulated compliance programme,” he told the media.

NBC News reviewed documents identifying transactions involving companies from sanctioned countries—Cuba, Iran, Russia, and Venezuela—conducted, among others, last year.

Block representatives declined to comment on specific violations to the publication but emphasised that they regularly conduct client compliance checks, adapting them to the current regulatory sanctions environment.

“[Block works] with internal and external legal teams for advice on the issue and appropriate measures to address it,” the company added.

In late January, Block laid off over 1,000 employees to streamline operations.