By Connor Hart
Block will pay a $40 million settlement with the New York State Department of Financial Services, which alleged the fintech company failed to maintain effective anti-money-laundering programs.
The agency said Thursday that its investigation into the parent company of Cash App and Square additionally found its lax practices allowed for largely anonymous and high-risk bitcoin transactions to proceed without proper scrutiny.
Block's rapid growth between 2019 and 2020 also contributed to what the department called a severe transaction alert backlog that went unaddressed for a significant period of time. The agency added that the company failed to meet other regulatory requirements, such as not monitoring transactions in a timely manner or completing proper due diligence.
Block said the settlement--which follows recent agreements with other state money transmission regulators--resolved matters primarily related to Cash App's past compliance program.
"This marks the resolution of all previously pending state money transmission license matters," a company spokeswoman said, adding that Block didn't admit to any of the agency's findings and is pleased to move past the matter.
"As the department has acknowledged, Cash App has devoted significant financial and other resources to compliance remediation and enhancements," she continued. "We share the department's dedication to addressing industry challenges and remain committed to investing across our operations to help promote a safe and healthy financial system."
Under the settlement, Block will be required to retain an independent monitor to oversee its compliance with the Department's regulations and its remediation efforts.
"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," Superintendent Adrienne Harris said.
Write to Connor Hart at connor.hart@wsj.com
(END) Dow Jones Newswires
April 10, 2025 13:18 ET (17:18 GMT)
Copyright (c) 2025 Dow Jones & Company, Inc.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.