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Block fined for US$40M over Cash App’s AML violations, agrees to settle. The civil penalty will paid to the New York Department of Financial Services (NYDFS). The penalty resolves failures in policing money laundering and enforcing customer verification requirements.
NYDFS found ‘critical gaps’ in Block's compliance programs, such as the Bank Secrecy Act (BSA), anti-money laundering (AML) policies, and know-your-customer (KYC) standards. These issues allegedly exposed Cash App to criminal use. Cash App processed US$283 billion in inflows in 2024 and had 57 million monthly active users at year-end.
The data is concerning given the loopholes found by NYDFS, highlighting the need for stricter crypto regulations . Block started offering bitcoin transactions in Cash App in 2018. Regulators say the company's fast expansion wasn't supported by the needed level of compliance infrastructure.
This resulted in illegal use, including financing terrorism, to remain undetected. Adrienne Harris, Superintendent of Financial Services for New York, emphasized, “Compliance functions must keep pace with company growth or expansion,” warning both traditional and crypto firms to take regulation seriously. An internal investigation in 2022 uncovered 8,359 Cash App accounts linked to a Russian criminal network.
This discovery showed extreme oversight vulnerabilities in Block's monitoring systems. Apart from the Block New York Department settlement, the company had also agreed to pay US$80 million in January 2025 to resolve similar charges with 48 other US state regulators. The current fine payment puts an end to all state-level compliance probes.
Block’s owner Jack Dorsey has been quite vocal on increasing Bitcoin adoption, stating in several interviews that BTC should be more than just a store of value: Jack Dorsey: Bitcoin fails by being irrelevant. It becomes irrelevant if it's only a store of value and not used for everyday payments. pic.
twitter.com/Y2dc7A5E45 So, it is surprising that the owner and the company have offered no official explanation for the US$40 million fine. The company neither admitted nor denied charges of wrongdoing.
It did, however, say that the New York settlement resolves all outstanding state money transmission license issues. Block will now appoint an independent monitor to supervise future compliance programs..
