The United States seems to continue its crusade against the bitcoin (BTC) industry. This time the attention is focused on the company Block, by bitcoiner and founder of Twitter (now X) Jack Dorsey. That company would be under regulatory scrutiny by the authorities of the North American country.
According to local press reports, a couple of former Block employees collaborated with US prosecutors, who are investigating the practices of Dorsey's company. These former employees would have revealed alleged regulatory compliance failures of that company , more precisely in Square and Cash App, which are two of its main units.
As explained, the former workers provided data to prosecutors in the Southern District of New York. Among those, documents that apparently show a lack of information about Square and Cash App to evaluate financial risks.
Such documentation also appears to show that Square processed thousands of transactions to countries that are sanctioned by the United States, such as Iran, Russia, Venezuela, and Cuba. Additionally, the documents apparently show that Block processed various cryptocurrency transactions for terrorist groups.
According to documentation provided by former Block employees to US prosecutors, the transactions involve credit card operations, transfers of US dollars, as well as bitcoin (BTC). All of these, it seems, were not reported to the US government.
The documents also seem to show operations in small amounts of dollars that were carried out last year and involving nations that the United States has sanctioned for several years.
One of the former employees noted that “everything in the compliance section” at Block was “flawed at the beginning.” A division, he says, “run by people who should not be in charge of a regulated compliance program,” reports NBC News.
Now, Block came to their defense and pointed out, through a spokesperson, that they have a “responsible and extensive” compliance program. Also, they regularly adapt their practices “to address emerging threats and an evolving sanctions regulatory environment.”
“Our compliance program includes systems, tools and processes for sanctions detection, as well as investigation and reporting on sanctions matters in accordance with our regulatory obligations,” the Block spokesperson said.
Block Amid US Regulatory Escalation
The apparent investigation carried out by US prosecutors against Block continues the authentic crusade that that country is carrying out against the BTC and cryptocurrency industry, intensified since last week.
US authorities placed under arrest the founders of the Samourai Wallet service, one of the platforms most concerned about user privacy.
According to the US, this platform was used for money laundering and operated as an unlicensed money transmission company, which is a violation of US laws.
It was recently learned that one of the detainees was released on bail. This is Keonne Rodríguez, who paid USD 1 million to be released from prison by order of Judge Barbara Moses.
In a similar thread of events, the United States managed to capture one of the first bitcoin investors , Roger Ver. By order of the Department of Justice, Ver was arrested in Spain. He is accused of allegedly evading the payment of almost 50 million dollars to the treasury.
Likewise, the SEC sent a Wells Notice to the Uniswap decentralized exchange. This is a warning prior to legal action by that office. According to the SEC, that exchange trades securities without authorization.
Along the same lines, the FBI warned users to use cryptocurrency exchanges and platforms that do not require the know-your-customer (KYC) protocol and raised the possibility that people's funds could be seized as a result of a raid.
This is a complete regulatory escalation by the United States on the cryptocurrency industry and which, in the latest event, resulted in a four-month prison sentence for Changpeng Zhao, the former executive director of the largest bitcoin and cryptocurrency exchange on the market, Binance. .
Zhao is currently expected to serve his sentence in SeaTac Prison, located in Washington state. Although light, it is a sentence that sends one of the largest bitcoin industry leaders in the world behind bars. A situation that puts companies in the sector that operate in the US on alert.
