Block Inc. fined $40m for crypto compliance failures by New York regulators
Block settles $40M fine over crypto compliance lapses
Block Inc., the digital payments firm founded by Jack Dorsey, has reached a $40 million settlement with the New York Department of Financial Services (NYDFS) over alleged deficiencies in its crypto compliance program.
The fine comes after an investigation found that Block’s Cash App platform failed to properly monitor “high-risk” Bitcoin transactions and violated consumer protection laws. According to the consent order, Block was too slow in reporting suspicious transactions and did not perform adequate due diligence on its customers. Despite the settlement, Block has not admitted any wrongdoing. This is not the firm’s first regulatory setback, as it also paid $80 million in fines to various state regulators earlier this year over similar anti-money laundering (AML) issues, reports Bloomberg.
Resilient growth and strategic positioning
Even as Block grapples with regulatory challenges, its underlying business remains robust. The company reported a 4.5% year-over-year increase in revenues, reaching $6.03 billion, while per-share earnings surged by 51% to $0.71. Moreover, Block’s merchant gross payment volume climbed 10% to $61.95 billion, highlighting the strength of its transaction infrastructure. Its Cash App unit, which has enabled users to buy Bitcoin since 2018, continues to be a significant growth driver. In the fourth quarter, Cash App generated $1.38 billion in gross profit, and the platform now serves over 57 million monthly transacting users. With the integration of crypto accounting software TaxBit in 2023, Cash App has further streamlined its crypto-related services, supporting both compliance and user convenience.
Looking ahead
As Block navigates the evolving regulatory landscape, its ability to balance compliance with aggressive growth will be key. Investors and regulators alike will monitor whether these settlements pave the way for a more robust AML framework and if Block can sustain its impressive financial performance amid ongoing scrutiny of crypto operations.
Read also: Trump World Liberty Financial refutes reports of Ethereum sell-off
