Jack Dorsey's Block fined $40M for alleged crypto compliance, AML failures

Digital payments company Block Inc. has reached a $40 million settlement with New York regulators over alleged compliance misconducts tied to its Cash App platform, Bloomberg reported on April 10.

Block was fined by the New York Department of Financial Services (NYDFS) following an investigation into Cash App’s Anti-Money Laundering (AML) and cryptocurrency compliance operations, Bloomberg said after reviewing the government agency’s consent order. 

NYDFS determined that Block allegedly violated consumer protection laws and didn’t conduct proper due diligence on its customers. The company was allegedly too slow in reporting suspicious transactions to regulators and failed to adequately screen so-called “high-risk” Bitcoin (BTC) transactions. 

Block confirmed that it had worked with NYDFS to “resolve the matter principally related to Cash App’s past compliance program.” However, it did not admit to any wrongdoing, according to Bloomberg. 

Block, which was founded by internet entrepreneur and Bitcoin advocate Jack Dorsey in 2009, had been negotiating a settlement with the NYDFS since last year, based on filings submitted with the US Securities and Exchange Commission (SEC).

Excerpts of Block Inc.’s February Form 10K filing with the SEC. Source: SEC

The NYDFS settlement isn’t the first monetary penalty Block has agreed to pay this year. As Cointelegraph reported, the company paid $80 million in fines to several state regulators over alleged violations tied to its AML program.

Related: NYDFS chief’s advice for crypto firms: ‘Never surprise your regulator’

Despite getting caught in regulatory crosshairs, Block’s underlying business remained strong at the end of 2024. Companywide revenues increased by roughly 4.5% year-over-year to $6.03 billion as per-share earnings climbed 51% to $0.71. 

The other positive takeaway was that Block’s merchant gross payment volume, or the total amount of money processed through its systems, increased by 10% to $61.95 billion. 

Cash App continues to be a source of growth, with the unit recording $1.38 billion in gross profit in the fourth quarter. 

The mobile payment service had more than 57 million monthly transacting users in early 2024. 

Despite reporting strong growth, Block Inc.’s (XYZ) share price has fallen more than 37% this year as part of a marketwide sell-off. Source: Yahoo Finance

Cash App users have been able to buy Bitcoin through the platform since at least 2018. In 2023, Cash App integrated crypto accounting software TaxBit, giving users an easier way to track and report their crypto-related taxes. 

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