Block, the fintech company behind Cash App, has been dealt with a $40 million penalty over lapses in Cash App’s anti-money laundering controls, found by New York’s top financial regulator.
The settlement concludes the final state-level probe into the company’s compliance practices and highlights the growing tension between fast fintech expansion and regulatory oversight. “All financial institutions, whether traditional financial services companies or emerging cryptocurrency platforms, must adhere to rigorous standards that protect consumers and the integrity of the financial system,” said Superintendent Adrienne Harris.
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The New York Department of Financial Services (NYDFS) announced on Thursday that there were “critical gaps” in Block’s Bank Secrecy Act and anti-money laundering (AML) programs.
According to regulators, Block failed to vet customers properly, monitor transactions, or manage risk, especially regarding Bitcoin activity on the Cash App. They were especially critical about how Block dealt with Bitcoin transactions. Bitcoin transactions have been supported on Cash App since 2018, however NYDFS found that transactions were allowed to proceed with minimal scrutiny, often anonymously, due to weak controls.
In one instance, Block’s internal review in 2022 revealed over 8,300 accounts linked to a Russian criminal network operating through Cash App. In 2024, Cash App has generated $5.24 billion in gross profit, accounting for over half of Block’s total gross profit.
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Block was founded in 2009 and led by Jack Dorsey, who is also the co-founder and former CEO of Twitter (now X). In addition to Cash App, Block also owns payment platforms Square and Afterpay, and the music streaming service Tidal.
Block recently hit the news for its plans for mass layoffs for the second time in just over a year. Dorsey stated in an email that the layoffs will impact more than 930 employees, with another nearly 200 managers being moved into non-management roles, and another nearly 800 open jobs will be closed.