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26/02/25
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Block Inc. in Talks with NY Regulators Over AML Compliance and Bitcoin Issues
Block Inc., the payments company co-founded by Jack Dorsey, is currently in discussions with New York state regulators to resolve accusations related to its Anti-Money Laundering (AML) protocols and Bitcoin initiatives. In a recent filing with the Securities and Exchange Commission, Block indicated that it is engaged in ongoing negotiations with the New York State Department of Financial Services (NYDFS) concerning various aspects of its compliance with the Bank Secrecy Act and its AML practices.
The filing highlighted that Block is actively exploring the possibility of reaching a settlement with NYDFS, although specific details regarding the negotiations have not been released. The firm acknowledged that it has recognized liabilities connected to this issue, but deemed the amount not significant enough to impact its financial results for the year 2024.
Over the past few years, Block has faced scrutiny from regulators across multiple states, particularly between January 2021 and March 2023. Investigations into its money transmission practices reportedly uncovered deficiencies in the company’s AML framework, particularly in relation to the requirements laid out in the Bank Secrecy Act. While Block reached a settlement with several state money transmission regulators earlier this year, New York was notably absent from that agreement.
As part of the settlement with other states, Block did not admit any wrongdoing but opted to pay $80 million in penalties, with plans for final payments by February 2025. This agreement requires the firm to engage an independent consultant to assess and enhance its AML strategies, along with establishing a Compliance Management Committee to oversee the implementation of necessary improvements.
In addition to these challenges, Block’s Cash App came under investigation for its handling of customer grievances earlier this year. The firm was ultimately fined $55 million and is expected to provide restitution ranging from $75 million to $120 million to affected Cash App users. Furthermore, Block is facing issues related to additional taxes claimed by the San Francisco Treasurer and Tax Collector for Bitcoin-related revenue during audits of tax receipts from 2020 to 2022.
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