Jack Dorsey’s Block Reportedly Under Investigation in the US

After Binance and Coinbase, the authorities in the US are now reportedly opening an investigation on the crypto business of Jack Dorsey’s payments firm, Block. As per reports, the US authorities have identified compliance violations from the fintech company that has now opened a deeper probe into its business practices. For some time now, authorities in the US have been maintaining a strict overview of companies that are engaged with or offering crypto-related services. The sector is loosely regulated in the US and authorities are concerned that cryptocurrencies could be misused for unlawful activities like money laundering and terror financing.

Dorsey, the founder and former CEO of X, operates two more companies under Block named Cash and Square. The investigating officers have reportedly collected documents from both of these units. The obtained paperwork show that these platforms were not collecting ample information of their users before offering them financial services that includes crypto-related activities, the NBC News has said in its report citing anonymous sources familiar with the matter.

The investigators have further alleged that the Block platform had been processing multiple crypto transactions even from nations that are part of US’ sanctions list. The investigating officials have alleged that Dorsey’s platforms have not being reporting potentially suspicious transactions related to credit cards and dollar-to-BTC transfers to the US government, as is required.

It was a former employee working for Dorsey, who first alerted the US officials about loopholes in the business operations of Block and its subsidiaries. Documents printed on over a hundred pages were handed over to the US officials from this former Block employee, the report added. As of now, Dorsey has not addressed the situation leaving the report neither confirmed nor denied.

Recently, Block claimed that it had completed the creation of a 3nm bitcoin mining chip that is aimed at decentralising the supply of BTC mining hardware. The platform now plans to work on a full Bitcoin mining system.

In February this year, Dorsey disclosed that Block held 8,038 BTC at the end of the fourth quarter of 2023. At the time, this holding was worth $340 million (roughly Rs. 2,818 crore).