Block, Inc. hit with $40M penalty after NYDFS finds AML violations
Block, Inc. hit with $40M penalty
Block, Inc., the financial technology firm led by Jack Dorsey, has agreed to pay $40 million to settle charges brought by the New York Department of Financial Services (NYDFS) over significant lapses in its anti-money laundering (AML) program.
The settlement concludes an investigation into Block’s Cash App platform, which offers both fiat and bitcoin services to consumers. Regulators found that the company failed to scale its AML compliance systems in line with the app’s rapid expansion and increased risk profile, according to the Block.
Risk outpaced controls
NYDFS said the firm had not implemented sufficient risk-based controls or conducted adequate customer due diligence, allowing high-risk and anonymous bitcoin transactions to proceed without proper review. The regulator emphasized that compliance must evolve alongside company growth, particularly in high-risk sectors such as digital assets.
“Block’s compliance program failed to adequately consider the substantial risks posed to an entity of its new size and complexity,” said Superintendent Adrienne Harris. “The rapid growth of Block’s Cash App absent a robust compliance function created vulnerabilities that violated New York’s financial regulations.”
While the company did not admit wrongdoing, it cooperated fully with the investigation and has since taken steps to enhance its compliance framework. As part of the settlement, Block will appoint an independent monitor to oversee remediation efforts.
A spokesperson for Block stated that the agreement “marks the resolution of all previously pending state money transmission license matters,” and emphasized the company’s commitment to strengthening its compliance infrastructure.
The NYDFS, which has been at the forefront of crypto regulation since launching its BitLicense framework in 2015, continues to increase scrutiny of digital finance firms operating in the state.
Meanwhile, Jack Dorsey, former Twitter CEO and long-time Bitcoin advocate, has called on Signal Messenger to integrate Bitcoin for peer-to-peer (P2P) payments, a move that could reframe the encrypted app’s current crypto strategy.
