Whistleblower Claims Square Processed Crypto Transactions For Terrorists: What's Going On With Block Stock?

Block, Inc. SQ shares are trading lower Wednesday. A report indicated federal prosecutors are examining the company’s financial transactions.

The Details:

According to an NBC News report, federal prosecutors are investigating claims of lapses in compliance at both Square and Cash App. 

A former employee reportedly provided prosecutors from the Southern District of New York with documents showing CashApp required insufficient information related to customer risk-assessment, Square processed thousands of transactions involving countries subject to economic sanctions and Block processed cryptocurrency transactions for terrorist groups.

NBC News said the former employee provided documents showing recent transactions involving entities in countries subject to U.S. sanctions, including Cuba, Iran, Russia and Venezuela.

"From the ground up, everything in the compliance section was flawed," the source told NBC News. "It is led by people who should not be in charge of a regulated compliance program."

A Block spokesperson provided the following statement to NBC News: 

"Block has a responsible and extensive compliance program and we regularly adapt our practices to meet emerging threats and an evolving sanctions regulatory environment. Our compliance program includes systems, tools, and processes for sanctions screening, as well as investigating and reporting on sanctions issues in accordance with our regulatory obligations. 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."

Related News: What’s Going On With Rivian Automotive Stock?

Is SQ A Good Stock To Buy?

Wall Street analysts view Block on the whole as a Buy, given the history of coverage over the past three months. Alex Markgraff from Keybanc in Block is the most optimistic, expecting a 18.75% rise in the stock in the coming year.

But looking at how the market as a whole thinks of the stock, you can reference historical price action for views on whether investors feel strongly about the stock one way or another. In the past 3 months, Block rose 3.36%, which indicates that opinion improved on the business and how attractive it is to own based on either its stock price, or underlying fundamentals, like revenue, which rose 24.12% over the past year.

A complete overview of how Wall Street views individual stocks is available here, while real time updates on the latest analyst actions will be delivered via Benzinga PRO. Try it for free.

SQ Price Action: According to Benzinga Pro, Block shares are down 8.45% at $66.83 at the time of publication Wednesday.

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