Photo: Mark Warner / CC BY 2.0 (2018 archive)
Block, the financial technology company behind Square and Cash App, has reached a preliminary agreement in principle with the U.S. Department of Justice to resolve a federal investigation into its anti-money-laundering controls, CoinDesk reported, with a gross payment of about $964 million reduced to roughly $764 million after credits for earlier regulatory settlements.
The agreement was reached in October and disclosed in a November 3 securities filing. It is not final: the resolution remains subject to a final agreement and court approval, and Block warned that the ultimate terms could result in losses exceeding the amount it has already set aside, Reuters reported. The company has accrued the $764 million.
The proposed deal would defer for three years a criminal charge alleging that Block failed to maintain an effective anti-money-laundering program, as required under the Bank Secrecy Act. CoinDesk noted the net payment exceeds the $566 million profit Block reported for the third quarter.
How the investigation started
The Justice Department and the Securities and Exchange Commission began examining Block’s compliance practices and related disclosures in 2023, after a report by short seller Hindenburg Research alleged that Cash App inflated its user numbers by counting duplicate and fraudulent accounts and that weak identity checks allowed criminals to use the platform for scams and money laundering. Block rejected the findings as inaccurate and misleading, and the SEC closed its separate investigation in March without recommending enforcement action.
In April 2025, New York’s financial regulator fined Block $40 million after finding serious gaps in its compliance systems, including a backlog of suspicious-transaction alerts that grew from about 18,000 in 2018 to more than 169,000 by 2020, and a screening system that did not automatically block bitcoin transfers to wallets linked to terrorism financing until exposure exceeded 10 percent.
The business behind the settlement
Block, led by co-founder Jack Dorsey, earns money from payment processing for merchants through Square and from consumer banking, lending and bitcoin trading through Cash App. The company reported third-quarter gross profit of $3.24 billion, up 22 percent from a year earlier, with Cash App gross profit up 27 percent and Square up 14 percent. Its bitcoin gross profit fell 50 percent to $52 million after Block cut fees on certain bitcoin transactions. The company raised its full-year gross profit forecast to $12.63 billion, according to Reuters.
JBizNews Desk | New York
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