Digital payments giant Block Inc. has reached a $40 million settlement with the New York Department of Financial Services (NYDFS) over alleged anti-money laundering (AML) and cryptocurrency compliance failures tied to its Cash App platform, according to a Bloomberg report.
The NYDFS consent order, reviewed by Bloomberg, revealed that Block failed to conduct adequate customer due diligence and delayed reporting suspicious transactions. The company was also found to have insufficient oversight of “high-risk” Bitcoin transactions, potentially exposing its users and regulators to significant compliance risks.
Block, founded in 2009 by Twitter co-founder and Bitcoin advocate Jack Dorsey, did not admit wrongdoing but stated it had worked cooperatively with NYDFS to resolve the matter, which stemmed from legacy compliance programs. The fintech company had been in settlement discussions with regulators since 2024, as disclosed in SEC filings.
This isn’t the first regulatory hurdle Block has faced this year. In a separate action, the company paid $80 million in fines to multiple state agencies for similar AML program violations, signaling broader scrutiny over its financial crime compliance framework.
Despite these setbacks, Block’s business fundamentals remain robust. The company closed out 2024 with $6.03 billion in revenue—a 4.5% year-over-year increase—and a 51% surge in per-share earnings to $0.71. Merchant gross payment volume rose 10% to $61.95 billion, underscoring strong demand for its payment services.
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Cash App, a key growth driver, generated $1.38 billion in gross profit in Q4 alone and boasted over 57 million monthly users in early 2024. The platform has supported Bitcoin transactions since 2018 and integrated crypto tax software TaxBit in 2023 to help users navigate digital asset reporting.
Still, Block’s stock has tumbled more than 37% this year amid a broader market downturn, reflecting investor concerns despite solid financial performance.
As regulators tighten their focus on crypto-linked services, Block’s case serves as a stark reminder for fintechs: regulatory compliance isn’t optional—especially in crypto finance.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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