Jack Dorsey's payments company Block has agreed in principle to pay $764 million to settle a U.S. Justice Department investigation into anti-money-laundering controls. The proposed payment exceeds the $566 million profit Block reported for the third quarter. Block reached the agreement in October and disclosed the agreement in a November 3 SEC filing.
The proposed settlement would defer a criminal charge for three years. The charge alleges that Block failed to maintain an effective anti-money-laundering program required by the Bank Secrecy Act. Credits for previous regulatory settlements would reduce the proposed monetary amount from approximately $964 million to $764 million. Block said in the filing that Block had already reserved $764 million.
The Justice Department and Securities and Exchange Commission began investigations in 2023 into allegations about Block's compliance practices and related disclosures after a short-seller report. The SEC ended the separate SEC investigation in March without recommending enforcement action. Hindenburg Research, the short seller, alleged that Cash App overstated user numbers by including fraudulent and duplicate accounts. Hindenburg also alleged that inadequate identity checks enabled criminals to conduct scams, money laundering and other illicit payments through Cash App. Block disputed Hindenburg's findings, calling the findings inaccurate and misleading.
New York's financial regulator imposed a $40 million fine on Block in April 2025 after identifying serious compliance-system deficiencies. The regulator's investigation found that unprocessed suspicious transaction alerts increased from about 18,000 in 2018 to more than 169,000 by 2020. The regulator also found that a Block screening system automatically blocked bitcoin transfers to wallets associated with terrorism financing only when wallet exposure exceeded 10%.
Block reported that third-quarter bitcoin ecosystem gross profit declined 50% to $52 million from $104 million a year earlier. Bitcoin ecosystem revenue decreased 11% to $1.8 billion. Block said lower fees on certain bitcoin transactions were the main reason for the gross profit decline. However, Block's other businesses continued to grow. Overall gross profit increased 22% to $3.24 billion, supported by greater activity in Cash App lending and payments.