Cash App owner Block pays $40 million in settlement over 'serious compliance deficiencies'
New York state’s top financial regulator struck a $40 million settlement with Block Inc., the parent of Cash App, over anti-money laundering failures.
New York state’s top financial regulator struck a $40 million settlement Thursday with Block Inc., the parent of Cash App, the popular money transmission service, after having found the company had “serious compliance deficiencies” related to its anti-money laundering program and transaction monitoring processes.
The deficiencies at Block, some involving cryptocurrencies, “created a high-risk environment vulnerable to exploitation by criminal actors,” the New York State Department of Financial Services said in the consent order, noting, for example, that Block’s system did not trigger alarms on bitcoin transactions involving terrorism-connected wallets until that exposure exceeded 10%.
Any exposure to terrorism-connected wallets is illegal, the department said.
The New York regulator examined Block’s practices from early 2021 to September 2022, concluding it did not keep pace with the significant growth it was experiencing. That resulted in Block’s “inability to fully comply with its obligation to effectively monitor, and thereafter report, the transactions being conducted on its platforms for suspected money laundering and other illicit criminal activity.”
Block, which did not admit to the department’s findings, said it was pleased to put the matter behind it.
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