Significant Anti-Money Laundering Violation! Jack Dorsey’s Block Reaches $40 Million Settlement with New York Financial Regulators

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Cash App Long-Term Compliance Risks

Block Inc., founded in 2009 by renowned internet entrepreneur and Bitcoin supporter Jack Dorsey, has been in negotiations with the NYDFS regarding settlement matters since last year, with relevant details disclosed in its 10-K financial report submitted to the U.S. Securities and Exchange Commission (SEC).

Reports indicate that the NYDFS investigation found significant deficiencies in Block’s execution of Cash App’s anti-money laundering and cryptocurrency compliance policies. These deficiencies include a failure to adequately conduct customer due diligence, untimely reporting of suspicious transactions, and improper screening of high-risk Bitcoin (BTC) transactions.

The NYDFS stated that these actions constituted violations of consumer protection regulations. According to a government-issued consent order, although Block did not admit to wrongdoing, it indicated that it has cooperated with regulatory authorities to address related issues and has made improvements regarding past compliance shortcomings.

Notably, this is not the first time Block has faced penalties this year due to compliance issues. Earlier this year, the company paid $80 million in fines to multiple state regulators for deficiencies related to anti-money laundering.

Business Operations Continue to Grow, Cash App Shines

Despite facing compliance pressures, Block maintains a growth trajectory for its overall business by the end of 2024. The company’s total revenue increased by approximately 4.5% year-over-year to $6.03 billion, while earnings per share surged 51% to $0.71.

Cash App continues to be one of the sources of growth momentum. In the fourth quarter of 2024, Cash App’s gross profit reached $1.38 billion. According to company data, the platform’s monthly active users surpassed 57 million in early 2024. Additionally, Block’s merchant gross payment volume also grew by 10% year-over-year, reaching $61.95 billion.

However, despite the solid operational data, Block Inc.’s stock price has still plummeted over 37% in 2024 amid a sluggish overall market, reflecting a heightened risk perception regarding the cryptocurrency and technology industries.