Block company, led by Jack Dorsey, fined $40 million by New York regulator due to alleged non-compliance issues related to crypto on Cash App.
Unleashed: Daily Hodl Exposes Block Inc's Crypto Flaws
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In a shocking revelation, Block Inc, the brains behind Cash App, has landed in hot water with New York's financial regulator over compliance issues with its Bitcoin transactions and anti-money laundering (AML) program. The company faces a whopping $40 million penalty as a result of these lapses.
According to the New York Department of Financial Services (NYDFS), the company's Cash App peer-to-peer money transmission service, which started offering Bitcoin transactions in 2018, saw significant shortcomings in customer due diligence practices and controls to prevent money laundering and illicit activities.
The investigation uncovered that Block failed to promptly address severe transaction alert backlogs, primarily due to rapid growth between 2019 and 2020. Furthermore, the company's alleged unfocused treatment of high-risk Bitcoin transactions enabled anonymous transactions to pass through without proper scrutiny.
In a mission statement, NYDFS declared, "The AML program run by Block, which governs both fiat and Bitcoin transactions on the Cash App platform, failed to adequately consider the substantial risks posed to an entity of its new size and complexity."
Superintendent of Financial Services Adrienne A. Harris stated, "Compliance functions must keep pace with company growth or expansion. The rapid growth of Block's Cash App absent a robust compliance function created risk and vulnerabilities that violated the rules financial services companies operating in New York must adhere to."
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- Despite facing compliance issues and a potential $40 million penalty, Block Inc, the company behind Cash App, still offers cryptocurrency transactions, including Bitcoin.
- The New York Department of Financial Services (NYDFS) found that Block Inc's customer due diligence practices and controls to prevent money laundering and illicit activities were inadequate.
- The investigation revealed that Block Inc's rapid growth between 2019 and 2020 led to severe transaction alert backlogs and an unfocused treatment of high-risk Bitcoin transactions.
- In a statement, Superintendent of Financial Services Adrienne A. Harris emphasized the importance of compliance functions keeping pace with company growth to avoid violating regulations.
- Amidst these developments in the world of finance and cryptocurrency, stay informed with news and updates from the Daily Hodl on Telegram, Facebook, and email alerts.
