Block Reaches $764 Million Settlement Over Money Laundering Investigation
Block reaches $764 million settlement with Justice Department
Block, the payments company led by Jack Dorsey, has reached a preliminary agreement to pay $764 million to resolve a federal investigation. The U.S. Department of Justice (DOJ) had been investigating the company’s anti-money-laundering (AML) controls, which are systems designed to prevent criminals from using financial services to hide illegal funds.
The agreement, disclosed in a November 3 filing with the Securities and Exchange Commission (SEC), addresses allegations that Block failed to maintain an effective AML program as required by law. The $764 million cost of the settlement is higher than the $566 million profit the company reported for the third quarter.
Key facts of the settlement and earnings
- The settlement includes a gross penalty of $964 million, which was reduced to $764 million after credits for previous regulatory payments.
- Block’s bitcoin gross profit dropped 50% to $52 million in the third quarter.
- The company’s overall gross profit rose 22% to $3.24 billion, driven by its lending and payments services.
- Block has already set aside the money needed to pay the settlement.
Lower trading fees impact bitcoin profits
While Block’s overall business grew, it earned less from users trading bitcoin on its Cash App platform. Bitcoin is a well-known digital currency. The company’s bitcoin gross profit fell from $104 million a year ago to $52 million this quarter. Block stated that this decline was primarily caused by its decision to reduce transaction fees for customers.
History of investigations and compliance issues
The DOJ and SEC began their investigations in 2023 following a report from a short-seller, Hindenburg Research. The report claimed that Block had weak identity checks and allowed fraudulent accounts to flourish. Block has rejected these findings, describing them as misleading and inaccurate. While the SEC closed its separate investigation in March without taking action, the DOJ probe continued.
This is not the first fine the company has faced regarding its compliance systems. In April 2025, New York financial regulators fined Block $40 million. That investigation found a massive backlog of more than 169,000 suspicious transaction alerts. Regulators also discovered that one system failed to automatically block transfers to wallets linked to terrorism until the exposure reached a specific threshold.
Timeline for the deferred criminal charge
As part of the proposed agreement, a criminal charge against Block will be deferred for three years. This type of arrangement typically means the government will eventually drop the charge if the company follows specific rules and improves its systems during that period.
Sources
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