An ongoing investigation by federal prosecutors in the United States is focusing on Block, Inc., a company co-founded by Jack Dorsey. Compliance issues within the payment platforms Square and Cash App have raised concerns, with a whistleblower providing documents alleging that the company processed transactions for users in countries facing U.S. economic sanctions. These transactions, including credit cards, fiat, and Bitcoin, were not reported to the government as required, totaling $57,805 on May 2.

The whistleblower also claimed that despite being made aware of these compliance problems, Block did not address them, indicating significant regulatory issues within the company. Additional sources familiar with Block’s operations supported these claims, suggesting that top executives and the board were aware of the situation.

In response, Block's Attorney defended the company, stating that they have a robust compliance program to address regulatory challenges and changes, especially concerning sanctions. This investigation occurs within a broader context of increased regulatory scrutiny on cryptocurrency companies, with recent cases involving Binance and Samourai Wallet founders facing legal action for money laundering suspicions.

Furthermore, the case of ETH being labeled an unregistered security by the SEC, with Consensys filing a lawsuit against the SEC regarding the classification of Ether, adds another layer of complexity to the regulatory landscape for cryptocurrency companies. These regulatory challenges underscore the importance of compliance and adherence to anti-money laundering laws in the cryptocurrency industry.