Jack Dorsey’s Block Eyes Settlement Over Money Laundering Claims

Ongoing Talks with NYDFS

In a recent filing with the U.S. Securities and Exchange Commission (SEC) dated February 24, 2025, Block disclosed that it is in “continuing negotiations” with NYDFS to resolve concerns related to its AML and Bitcoin compliance programs. These discussions follow a proposal from NYDFS in January, which Block is considering as part of a potential settlement.

While the exact details of the alleged violations and settlement terms have not been disclosed, Block has stated that it has accounted for the potential liability. However, the company emphasized that any financial penalties or settlements stemming from these negotiations would not have a material impact on its financial performance for 2024.

Previous Regulatory Challenges and Settlements

This is not the first time Block has faced scrutiny from regulators over compliance issues. Between January 2021 and March 2023, several state financial regulators investigated the company’s adherence to AML regulations. These examinations reportedly revealed deficiencies in Block’s compliance with the Bank Secrecy Act, which is designed to prevent money laundering and financial crimes.

As a result of these investigations, Block reached a major settlement in January 2025 with 48 state financial regulators. Under the agreement, the company paid $80 million in penalties to resolve claims that its AML program lacked adequate safeguards against illicit financial activities. Although Block neither admitted nor denied any wrongdoing, it agreed to take corrective actions, including hiring an independent consultant to review its AML policies and forming a Compliance Management Committee to oversee the implementation of regulatory improvements.

Additional Regulatory and Legal Challenges

Beyond AML concerns, Block has been dealing with several other regulatory and legal challenges in recent months. One of the most significant involves an investigation by the Consumer Financial Protection Bureau (CFPB) into its payment platform, Cash App. The CFPB examined the company’s handling of customer complaints and dispute resolution processes, leading to a $55 million fine in early 2025. In addition to the penalty, Block set aside between $75 million and $120 million for potential reimbursements to affected customers.

Another ongoing issue involves a tax dispute with the San Francisco Treasurer and Tax Collector. Local authorities claim that Block owes additional taxes related to Bitcoin-related revenue from 2020 to 2022. Block has pushed back against these claims, arguing that the tax assessment is incorrect and seeking a refund for payments it has already made.

Company Response and Future Outlook

In response to the growing regulatory scrutiny, Block has stated that it is significantly increasing its investment in compliance and risk management. The company has acknowledged that as its financial platforms, including Cash App and Bitcoin services, have expanded, so have the regulatory expectations it must meet.

Block has pledged to work closely with regulators and ensure its platforms comply with financial laws designed to prevent fraud, money laundering, and other illicit activities. The company has emphasized that it remains committed to improving its internal controls, strengthening compliance frameworks, and fostering transparency with authorities.

The outcome of Block’s negotiations with NYDFS could have significant implications for the company’s operations and regulatory approach moving forward. As financial technology firms face increasing oversight, industry experts will be watching closely to see how Block adapts to these challenges and whether additional regulatory actions could follow.

For now, the fintech giant remains engaged in discussions with New York regulators, hoping to reach a resolution that will allow it to move forward while reinforcing its commitment to compliance and regulatory best practices.