Block, the parent organization of Cash App and Square, is reportedly under investigation by the Southern District of New York’s federal prosecutors due to accusations of compliance failures. Persistent allegations suggest that Block failed to properly handle customer data, which has cast doubt over its operations.
An ex-Block employee highlighted the company’s inadequate data management, which led to intense scrutiny from regulatory bodies. These revelations have sparked widespread concern in the industry. Consequently, the company finds potential legal challenges looming.
The evidence implies that Block’s platforms may have been used for transactions linked to sanctioned countries and possibly leveraged by terrorist groups. Allegations suggest the company’s weak security measures could have facilitated unlawful activities, raising grave concerns about regulatory compliance.
Detailed documentation provided by the whistleblower shows transactions with sanctioned countries like Russia, Cuba, Iran, and Venezuela. The whistleblower alleges the compliance department’s process to be fundamentally flawed.
Block’s compliance crises under investigation
Such transactions breach domestic and international regulations, exposing Block to potential legal repercussions.
Edward Siedle, a former SEC attorney who defended the whistleblower, maintains that senior management and board members were aware of these shortcomings. He argues that despite this awareness, they failed to take corrective action. Siedle believes these actions bear serious legal implications.
In response, Block representatives acknowledged the ongoing investigation but denied the former employee’s allegations. They claim their compliance program is sound and stress that they have reported numerous transactions to the Office of Foreign Assets Control (OFAC). They state that the unreported transactions were due to system errors and acceptable exceptions according to financial regulations.
Despite the company’s assurances, the whistleblower insists on the depth of the compliance problems, providing supplementary evidence to support their allegations. The case remains under review by legal authorities.
