Bitcoin-Friendly Block Inc Is Under Federal Probe: NBC

A new exclusive report from NBC has revealed that fintech giant Block Inc. is under a Federal probe on allegations involving illegal crypto transactions.

Basis for the Block Probe

The NBC report hinted at the ongoing search of Block’s transactions for connections to illegal Bitcoin processing for terrorist organizations. The regulators are specifically looking for signs, stemming from years of failure to fully comply with established anti-money laundering systems on Cash App and Square.

Founded by Jack Dorsey, Cash App, Block’s versatile payment app is one of the first few applications to integrate Bitcoin. The app even went as far as integrating Bitcoin Lightning Network in 2022 to solidify its position in the crypto payments ecosystem.

In the ongoing probe, former employees informed prosecutors from the Southern District of New York that Block collects enough data to be able to tell that some users from sanctioned countries are being served. 

The former employee reportedly shared documents of over a hundred pages that show varying transactions processed by Block. These transactions were to countries like Russia, Venezuela, and Cuba amongst others. 

While it remains uncertain the duration of the investigation is focused on, other employees verified the veracity of the compliance flaws.

Another Crypto-Linked Charges Incoming?

Over the past few years, lawmakers and regulators from the United States have beamed their searchlights on the crypto ecosystem. The distrust for crypto-based payment processors is justified by the pseudo-anonymity of the underlying transactions.

Binance Exchange was in the cross-hairs for related charges last year for permitting sanctioned entities to trade on its platform. For its violations, the United States Department of Justice (DOJ) fined it $4.3 billion with a major leadership overhaul.

Changpeng ‘CZ’ Zhao, the Binance founder and former CEO stepped down and has bagged a 4-month jail term. While it remains unclear how the Block probe will go, there might be more turbulent times ahead for the firm.