HomeFinance NewsFinanceCash App and Square Under Federal Scrutiny: Shady Money Moves Revealed

Cash App and Square Under Federal Scrutiny: Shady Money Moves Revealed


Federal prosecutors are examining financial transactions at Block, owner of Cash App and Square


Federal prosecutors are scrutinizing Block, a financial technology company founded by Jack Dorsey, over widespread compliance issues at its divisions, Square and Cash App.

Internal documents obtained by prosecutors reveal that Block: * Failed to adequately collect customer information to assess risks.

* Processed transactions for sanctioned countries (e.g., Iran, Russia).

* Failed to report suspicious cryptocurrency transactions involving terrorist groups.

* Processed hundreds of thousands of transactions, primarily in credit cards, dollar transfers, and Bitcoin, without reporting them to the government.

* Ignored warnings about compliance breaches.

A former employee provided prosecutors with hundreds of documents supporting these allegations.

The investigation covers several years and involves both Square’s merchant platform and Cash App’s mobile payment services.

Block’s internal monitoring systems were allegedly flawed, with deficiencies identified by an external consultant.

The former employee claims that these lapses were known to Block’s leadership and board members.

Notably, two directors have recently left the board.

Block maintains that it has a robust compliance program and has reported transactions to the Treasury Department’s Office of Foreign Assets Control (OFAC), which administers economic sanctions.

However, the former employee disputes this claim.

The investigation highlights concerns about the safety of mobile payment apps, which are increasingly popular and have been linked to financial crimes.

Cash App, like other platforms, has been scrutinized for its anti-money laundering and identity verification procedures.

In a related development, Sutton Bank, which partners with Cash App for debit cards, has entered into a consent order with regulators, alleging violations of the Bank Secrecy Act and other compliance issues.

Block has expressed its commitment to addressing any deficiencies and investing in its compliance program.

Nevertheless, the ongoing investigation threatens to damage its reputation and raises questions about its ability to prevent financial crimes.

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    “- “From the ground up, everything in the compliance section was flawed,” the former employee told NBC News. “It is led by people who should not be in charge of a regulated compliance program.” “

    “- Block has encountered difficulties with regulators before. In late 2021, the Financial Market Supervisory Committee of the Bank of Lithuania ordered Verse Payments Lithuania UAB, the company’s European version of Cash App, to determine the identity of its existing clients whose identities had not been established or had been established out of compliance with the law on Prevention of Money Laundering and Terrorist Financing.”


    “- The former employee provided prosecutors from the Southern District of New York documents that they say show that insufficient information is collected from Square and Cash App customers to assess their risks”

    “- Most of the transactions discussed with prosecutors, involving credit card transactions, dollar transfers and Bitcoin, were not reported to the government as required”

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