Block Inc. Settles with New York Regulators for $40M Over Cash App Compliance Violations

Digital payments company Block Inc. has agreed to a $40 million settlement with the New York Department of Financial Services (NYDFS) following allegations of compliance failures tied to its popular Cash App platform, according to a report from Bloomberg on April 10.

The settlement stems from a NYDFS investigation into the app’s anti-money laundering (AML) and cryptocurrency-related oversight.

According to a consent order reviewed by Bloomberg, regulators concluded that Block fell short in conducting customer due diligence, failed to properly flag and report suspicious activity, and inadequately screened high-risk Bitcoin transactions.

While Block acknowledged working closely with regulators to resolve the matter, it did not admit to any wrongdoing.

“We’re pleased to have resolved this matter, which primarily concerns Cash App’s historical compliance program,” the company said in a statement.

Block, co-founded by Jack Dorsey in 2009, had reportedly been in settlement talks with the NYDFS since 2023.

The company disclosed the investigation and ongoing negotiations in filings with the U.S. Securities and Exchange Commission.

This is not Block’s first regulatory penalty in 2024. Earlier this year, the company agreed to pay $80 million in fines to multiple state regulators for similar AML-related compliance issues, according to a previous report by Cointelegraph.

Despite these legal challenges, Block’s financial performance remained solid through the end of 2024.

Jack Dorsey's financial technology firm Block Inc. said Thursday that it will pay a $40 million penalty to New York regulators over allegedly lax anti-money laundering procedures on its payments platform Cash App. https://t.co/ZcCSmcZ5KV

The company reported a 4.5% increase in year-over-year revenue, reaching $6.03 billion, while per-share earnings surged 51% to $0.71.

Gross payment volume rose 10% to $61.95 billion, reflecting continued strength in its merchant services business.

Cash App, a key revenue driver for Block, generated $1.38 billion in gross profit in the fourth quarter alone.

The app boasted over 57 million monthly active users in early 2024 and has supported Bitcoin purchases since 2018.

In 2023, it expanded its crypto services by integrating tax reporting software TaxBit, making it easier for users to manage their crypto-related tax obligations.

Block has seen its stock tumble 32% year-to-date and over 80% since its 2021 peak.

Despite having 57 million monthly active users, analysts are questioning whether Block can successfully convert them into full-service banking customers, especially in a competitive market where fintech rivals like Robinhood are rolling out high-interest accounts and savings products.

To address this challenge, Block is ramping up efforts to rebrand Cash App from a peer-to-peer payment tool to a comprehensive banking platform, according to a report by Bloomberg.

It has launched marketing campaigns in major U.S. cities and introduced new features like high-yield savings, debit cards, short-term loans (Cash App Borrow), and buy now, pay later services via Afterpay.

The platform’s direct deposit user base reached 2.5 million in December, a critical growth metric as users with direct deposit are more likely to adopt additional financial products.

However, trust remains a major obstacle. Earlier this year, the Consumer Financial Protection Bureau ordered Cash App to refund users up to $120 million over failures in fraud investigations.

Block also settled with regulators over its anti-money laundering practices and continues to negotiate with the New York Department of Financial Services.

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