Block Inc., the digital payments company founded by internet entrepreneur and Bitcoin advocate Jack Dorsey, has been fined $40 million by the New York Department of Financial Services (NYDFS). The settlement arose from alleged compliance misconducts related to the company’s Cash App platform.
The penalty stems from a probe into Cash App’s Anti-Money Laundering (AML) and cryptocurrency compliance methods. The NYDFS alleges that Block breached consumer protection laws by not performing suitable due diligence on its customers, and was not quick enough in reporting suspicious transactions to regulatory bodies. Notably, it is reported that Block inadequately monitored “high-risk” Bitcoin transactions.
Block has stated it cooperated with the NYDFS to tackle the issue, which was fundamentally associated with Cash App’s previous compliance program. The company, however, has not accepted any misconduct. Block has reportedly been in discussions regarding this resolution with the NYDFS since 2022.
Notwithstanding this recent fine, Block is holding its own. The company’s revenue boosted by around 4.5% year-over-year, landing at $6.03 billion, with per-share earnings seeing a significant climb of 51% to $0.71. Notably, Block’s merchant gross payment volume—the total volume of currency processed through its systems—saw a rise by 10% to $61.95 billion.
Moreover, Cash App, the medium still in the eye of the storm, also seems to be flourishing. In early 2024, the mobile payment service reported more than 57 million monthly transacting users, contributing to a gross profit tally of $1.38 billion in the fourth quarter. With users able to buy Bitcoin through the platform since 2018, Cash App continues to be a significant player in Bitcoin transactions.