US Probe Questionable Financial Transactions At Block Who’s Terminals Are Widely Used By OZ Retailers

Australian regulators have not said whether they are set to follow the lead of US prosecutors and investigate the actions of Jack Dorsey’s Block whose Square retail transaction terminal are widely used in Australia.

US prosecutors are examining financial transactions at Jack Dorsey’s Block whose Company also operate in Australia, after allegations emerged that their technology is being used to process transactions to countries subject to economic sanctions and whether Block handled cryptocurrency transactions for terrorist groups.

In Australia, several retailers are moving to the $329 Block terminal with questions now being asked as to where money transacted on their machines is ending up.

The Companies local web site claims that retailers can take payments quickly and confidently knowing every sale is securely encrypted.

An alternative is the deduction of 1.6% rate for every tap or insert on a Square machine.

US federal prosecutors have spoken to a former employee who claims that the business has engaged in widespread compliance lapses at Square and Cash App, the company’s two main units.

Areas under investigation include whether the company failed to gather sufficient information on customers to assess risks.

They are also investigating if Square processed transactions involving countries subject to economic sanctions and if Block handled cryptocurrency transactions for terrorist groups.

A spokesperson for Block said the company has a “responsible and extensive compliance program” and that it regularly adapts its practices to meet “emerging threats and an evolving sanctions regulatory environment.”

The spokesperson added “We are continually improving the safety and security of our ecosystem is a top priority for Block. We have been and remain committed to building upon this work, as well as continuing to invest significantly in our compliance program,” the spokesperson said.

A spokesperson for the Southern District of New York has not commented on the investigation. .

The former employee said the company did not address breaches when alerted, and most of the transactions being examined were not reported to the government as required, NBC reported.

Shares in Afterpay, Square and Cash App-owner Block are down 5.9 per cent to $105.58 near lunchtime on news reports in the US that federal prosecutors are ramping up their investigation into the business.

Block will report is March quarter profit on Friday morning in Australia.