Block was reported to have thousands of transactions made using Bitcoin to countries with economic sanctions.
👉 Background: Block, formerly known as Square, is the second lovechild of tech founder Jack Dorsey (after Twitter - now X). Square launched back in 2014 as a business that created a point of sales dongle for small businesses.
👉 What happened: Since then, Block has become a beast of a business. It acquired Afterpay for $39 billion worth of shares and has also grown its Cash App to over 56 million monthly users, who use the app to send and receive money...and Bitcoin.
👉 What else: Now, US Federal Prosecutors are digging into the compliance at Block because thousands of transactions were made using Bitcoin to countries with economic sanctions. None of this was reported to the government like they should have been.
💡Even big companies can be lured by the riches of ‘risky’ industries.
💡For fintech companies, there is a significant appeal to offer digital currencies to diversify revenue. In the last quarter of 2023, Block reported $66 million USD in gross profit on bitcoin sales.
💡But given the crypto space has been ripe with money laundering and terror financing, these profits needs to be balanced with the proper levels of compliance. Block may be finding out the hard way what happens when you don’t take this seriously enough.
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