On April 10, 2025, the New York Department of Financial Services (“NYDFS”) announced that it imposed a $40 million penalty on Block Inc., a publicly-traded financial services and technologies company, for having deficient anti-money laundering and virtual currency compliance programs. Block, which owns and operates Cash App, has been licensed in the State of New York to operate as a money transmission business since 2013 and as a virtual currency business through Cash App since 2018. Consequently, Block is subject to the Bank Secrecy Act/Anti-Money Laundering (“BSA/AML”) regulations promulgated by the NYDFS.
According to the NYDFS, it conducted an investigation that revealed deficiencies in Block’s AML compliance program due to the company’s rapid growth between 2019 and 2020 – deficiencies that include delayed filings of suspicious activity reports (“SARs”), insufficient sanctions screenings, and inadequacies in its customer due diligence. The NYDFS indicated that, between 2018 and 2021, Block experienced a significant backlog in transaction monitoring alerts that caused Block to file some SAR’s over a year after the alert was first generated. NYDFS was also concerned with Block’s oversight of “restricted” accounts on Cash App that permitted fiat transactions under a certain limit without requiring a full identity verification – a practice that allowed bad actors to complete transactions on Block’s platform by opening multiple restricted accounts. Block also allegedly permitted largely anonymous Bitcoin transactions to be processed without proper scrutiny.
In the Consent Order, the NYDFS acknowledged Block’s cooperation with investigators and the company’s significant efforts to remediate the identified deficiencies, including its commitment to resolve backlogs, increase compliance staffing resources, and limit the number of accounts a customer can create. Block also agreed to hire an independent monitor, selected by the NYDFS, to evaluate its compliance program and oversee its compliance improvements.
NYDFS Press Release | Consent Order