Federal prosecutors are scrutinizing Block’s crypto unit, working with whistleblowers to investigate the company's compliance practices, two sources familiar with the matter told NBC News on Wednesday.

Due to inadequate checks, the company founded by Twitter co-creator Jack Dorsey allegedly processed crypto transactions linked to sanctioned countries and terrorist organizations, sources told NBC News. However, its allegedly laxed crypto practices are just one slice of the “widespread and yearslong compliance lapses” at Block’s Square and Cash App units, the publication reported.

“From the ground up, everything in the compliance section was flawed,” a former Block worker is quoted as saying to NBC News, claiming that "thousands" of questionable transactions went unreported to the U.S. …