Block Fined $40M for Cash App Compliance Failures

Block Faces $40 Million Fine for Cash App Compliance Failures

Block, Inc., the financial technology company founded by Jack Dorsey, has been fined $40 million by the New York State Department of Financial Services (DFS). This penalty settles an investigation into significant compliance failures within its Cash App platform.

Key Findings of the DFS Investigation

• Weak Anti-Money Laundering (AML) Practices: The DFS uncovered critical deficiencies in Block's AML program, including a backlog of over 169,000 suspicious activity alerts by 2020. Delayed Suspicious Activity Reports (SARs) averaged 129 days.
• Inadequate Bitcoin Transaction Monitoring: The investigation revealed insufficient monitoring of Bitcoin transactions linked to terrorism-related wallets and mixers.
• Vulnerable Know Your Customer (KYC) Procedures: Weak KYC practices allowed bad actors to exploit the platform, with 8,359 accounts linked to a Russian criminal network identified in 2022.

The DFS examination, conducted in 2021 and 2022, highlighted that Block's compliance systems failed to keep pace with the company's rapid growth. Block's revenue reached $21.91 billion in 2023, with assets more than doubling from $15.02 billion in 2021 to $34.06 billion.

According to Superintendent Adrienne Harris, "All financial institutions…must adhere to rigorous standards that protect consumers and the integrity of the financial system. Compliance functions must keep pace with company growth." This settlement underscores the importance of prioritizing robust compliance measures, especially within the rapidly evolving cryptocurrency space.

Consequences for Block

Beyond the $40 million fine (payable within 10 days), Block is required to:

• Engage an independent monitor for 12 months, selected by the DFS, to overhaul its AML, sanctions, and transaction monitoring programs.

This settlement follows a previous $80 million penalty Block paid in January 2025 to 48 state financial regulators for similar AML violations on Cash App.

The Importance of Robust Blockchain Security

This case highlights the critical need for robust security and compliance practices within the blockchain industry. At Codeum, we understand these challenges. We provide comprehensive blockchain security solutions, including:

• Smart contract audits
• KYC verification
• Custom smart contract and DApp development
• Tokenomics and security consultation
• Partnerships with launchpads and crypto agencies

Contact Codeum today to ensure your blockchain project meets the highest security and compliance standards.