Twitter co-founder Jack Dorsey’s fintech company Block Inc (NYSE:SQ) is being examined by Federal prosecutors for compliance lapses within its Square and Cash App platforms.
According to an NBC report citing “two people with direct knowledge of the contacts”, a former employee held discussions with prosecutors from the Southern District of New York.
Block allegedly processed thousands of transactions in countries that are subject to economic sanctions, including cryptocurrency transactions for known terrorist organisations.
Cash App lets users send and receive money and bitcoin; the latter accounts for nearly half of all revenues, though profit margins are minuscule.
Binance, the world’s largest cryptocurrency exchange, faced similar allegations, leading to founder Changpeng ‘CZ’ Zhao’s four-month prison term.
Block shares tumbled 8.5% on Wednesday.
Proactive has approached Block for a comment.