Block Inc., the parent company of Cash App and led by Twitter co-founder Jack Dorsey, has agreed to pay a $40 million civil penalty to New York state regulators for failing to enforce proper anti-money laundering (AML) protections on its mobile payment platform.
The New York State Department of Financial Services (NYDFS) announced the settlement on Thursday, highlighting “critical gaps” in Block’s compliance programs related to the Bank Secrecy Act, AML rules, and customer identity checks. These failures, according to the agency, left the company vulnerable to misuse by criminals.
As part of the settlement, Block will also be required to hire an independent monitor to review and improve its compliance systems.
This latest penalty follows a larger $80 million settlement Block reached in January with 48 U.S. state regulators over similar allegations. In both cases, the company did not admit or deny any wrongdoing. In a statement, the California-based fintech firm said the agreement resolves “all previously pending state money transmission license matters.”
Cash App, like similar platforms such as Venmo, makes sending money as simple as a few taps on a smartphone. But this convenience also comes with risks.
NYDFS said Block failed to conduct adequate background checks on users and didn’t put strong enough controls in place to detect and prevent illegal transactions. These lapses, especially in the area of cryptocurrency—such as Bitcoin, which Cash App started offering in 2018—created what the regulator described as an environment “vulnerable to criminal exploitation.”
One internal investigation by Block in 2022 uncovered 8,359 Cash App accounts connected to a Russian criminal network, further raising concerns about the company’s oversight.
New York’s top financial regulator, Adrienne Harris, emphasized that compliance efforts must grow alongside the company’s business. “Compliance functions must keep pace with company growth or expansion—whether in traditional finance or crypto,” she said.
In 2024 alone, Cash App processed $283 billion in inflows and had 57 million monthly active users by year’s end.
The settlement marks another sign that regulators are increasing pressure on tech-driven financial platforms to follow the same rules as traditional banks—especially when it comes to preventing money laundering and protecting national security.
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