Jack Dorsey’s Block Reportedly Under Investigation in the US

After Binance and Coinbase, US authorities are now opening an investigation into the crypto business of Jack Dorsey's payments company, Block. US authorities have reportedly identified compliance violations by the fintech firm and have now opened a deeper investigation into its business practices. For some time now, US authorities have maintained a strict overview of companies that engage in or offer crypto-related services. The sector is poorly regulated in the United States, and authorities are concerned that cryptocurrencies could be misused for illegal activities such as money laundering and terrorist financing.

Dorsey, the founder and former CEO of X, operates two other companies under Block called Cash and Square. According to reports, investigating officers have collected documents from these two units. The obtained documentation shows that these platforms were not collecting extensive information from their users before offering them financial services that included activities related to cryptography, NBC News said in its report citing unnamed sources familiar with the matter.

Investigators have also alleged that the Block platform had been processing multiple crypto transactions even from nations on the US sanctions list. Investigating officials have alleged that Dorsey's platforms failed to report potentially suspicious transactions involving credit cards and dollar-to-BTC transfers to the US government as required.

It was a former employee who worked for Dorsey who first alerted US officials to gaps in the business operations of Block and its subsidiaries. The documents, printed in more than a hundred pages, were given to US officials by this former employee of Block, the report added. As of now, Dorsey has not addressed the situation, and the report has not been confirmed or denied.

Block recently claimed to have completed the creation of a 3nm bitcoin mining chip that aims to decentralize the supply of BTC mining hardware. The platform now plans to work on a complete Bitcoin mining system.

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