Block Inc. has agreed to pay New York $40 million to settle accusations over money-laundering controls, marking the last state-based settlement involving Block’s Cash App.
$40 Million Settlement: Block Agrees to Fix Money-Laundering Controls
The payments and blockchain firm has agreed to an outside monitor as it resolves its compliance with New York regulations.
Block Inc., the company founded by Jack Dorsey, has agreed to pay New York $40 million to settle accusations over money-laundering controls. The settlement marks the last state-based settlement involving Block’s Cash App.
The New York Department of Financial Services (NYDFS) accused Block of not properly managing its money-laundering safeguards, citing a ‘lax treatment of high-risk bitcoin transactions‘ that allowed for effectively anonymous transactions through its system. This lack of robust compliance created risk and vulnerabilities that violated the rules financial services companies operating in New York must adhere to.
The NYDFS Superintendent, Adreienne Harris, stated that the rapid growth of Block’s Cash App without a proper compliance function created these risks and vulnerabilities. The department is taking decisive steps to ensure accountability, including appointing an independent monitor to oversee corrective measures.
Block has maintained that it did not admit to any of the findings in the New York case but is ‘pleased to put this matter behind us.’ The company has reached a settlement with the final remaining state money transmission regulator, following previous settlements with other state regulators.
The NYDFS examinations covered a period spanning 2021 and 2022 at Block’s company. The resulting consent order noted ‘serious compliance deficiencies’ that had created a high-risk environment vulnerable to exploitation by criminal actors. Since 2018, Block has held a New York BitLicense to conduct digital assets operations in the state.
As part of the settlement, Block will submit to an outside monitor and take corrective measures to address its money-laundering controls. The company’s Cash App will no longer be subject to the same level of scrutiny as it was prior to the settlement.
