Block to Pay $80 Million to Settle AML Violation Allegations

Block has agreed to pay an $80 million fine and undertake corrective actions to resolve a coordinated enforcement action by 48 state financial regulators that alleged the company violated Bank Secrecy Act (BSA) and anti-money laundering (AML) laws.

The enforcement action centered on Block’s mobile payment service, Cash App, the Conference of State Bank Supervisors said in a Wednesday (Jan. 15) press release.

In addition to paying the assessed penalty to the state agencies, Block agreed to hire an independent consultant to review its BSA/AML program, submit a report to the state within nine months, and correct any deficiencies found in the review within 12 months of filing the report, according to the release.

“Block cooperated with the states in the settlement,” the release said.

Reached by PYMNTS, a Block spokesperson said in an emailed statement that the agreement resolved a previously disclosed matter having to do with Cash App’s past compliance program.

“As Cash App has grown, we’ve significantly increased our investment in compliance and risk management, while serving millions of customers with critical, affordable financial services,” the statement said. “We share our regulators’ commitment to addressing industry challenges and will continue to invest across our operations to help promote a safe and healthy FinTech ecosystem.”

A representative of one of the states participating in the coordinated enforcement action, Illinois Department of Financial and Professional Regulation (IDFPR) Secretary Mario Treto, Jr., said in a Wednesday press release that the action is part of that organization’s mission of “ensuring the integrity of the financial services industry and protecting consumers.”

“The Department will continue to take action, including collaborating with fellow regulators, to ensure compliance with all applicable laws,” Treto said.

In an earlier, separate case, it was reported in August that Block agreed earlier in 2024 to pay $15 million to settle a lawsuit claiming the company had failed to protect Cash App users from data breaches.

Cash App and Block were sued in 2022 for “negligent” behavior in connection with a data breach in late 2021 that apparently compromised 8.2 million current and former users’ personal information.

Block said that the breach was the result of a former employee still having access to reports that contained users’ full names and brokerage account numbers.