Jack Dorsey's Block has agreed in principle to pay $764 million to settle a Justice Department investigation into anti-money-laundering controls at Cash App, and the number is worth sitting with for a second. The deal, reached in October and disclosed in the company's quarterly filing on November 3, is bigger than the $566 million profit Block reported for the third quarter. Block made less money in three months than it has now agreed to hand over for compliance failures that go back years. The settlement is not final yet, and Block disputes the government's case, but the money is already set aside on the books and the company has warned the final bill could be higher.
A Fine Bigger Than the Quarter
The deal takes the form of a three-year deferred prosecution agreement. Under it, the Justice Department would hold off on a criminal charge accusing Block of failing to maintain an effective anti-money-laundering program under the Bank Secrecy Act, and if Block meets the terms for three years, the charge gets dismissed. The gross figure is about $964 million, cut to $764 million after credits for earlier regulatory settlements, and Block has accrued the full amount as of September 30. The company says it cannot guarantee a final agreement will be reached on those terms, or at all, and that losses above the amount set aside are reasonably possible. It is the same path Binance took in 2023, when it paid $4.3 billion to settle its own money-laundering case.
It Started With a Short Seller
The investigation goes back to March 2023, when short seller Hindenburg Research published a report alleging that Cash App inflated its user numbers by counting duplicate and fraudulent accounts and that weak identity checks let criminals use the platform for scams and money laundering. Block called the report inaccurate and misleading at the time, and it still disputes the basis and methodology of the government's assessment. The Justice Department and the SEC opened inquiries anyway, and while the SEC closed its side in March of this year without recommending enforcement action, the Justice Department kept going. State regulators moved first, and the list of what they found is long.
New York's financial regulator fined Block $40 million in April 2025 after finding a backlog of suspicious-activity alerts that grew from about 18,000 in 2018 to more than 169,000 by 2020. The same review found a screening system that did not block bitcoin transfers to wallets linked to terrorism financing until exposure passed 10 percent. A multistate settlement added $80 million in January 2025, and 46 states took another $45 million in July over Cash App fraud protections. Those payments account for part of the $200 million credit against the Justice Department figure.
Bitcoin Was the Only Part That Shrank
The settlement landed on top of a quarter that was otherwise strong, which makes the bitcoin numbers stand out even more. Block's total gross profit rose 22 percent to $3.24 billion, with Cash App up 27 percent to $2.07 billion and Square up 14 percent to $1.16 billion. Bitcoin went the other way. Gross profit from the bitcoin business fell 50 percent to $52 million, down from $104 million a year earlier, and bitcoin revenue dropped 11 percent to $1.8 billion.
Block says the drop was its own choice, the result of cutting fees on certain Cash App bitcoin transactions as part of a push to turn bitcoin into something people spend rather than something they trade. The company auto-enabled about 1 million Square merchants for Lightning payments in May, waived processing fees on bitcoin through 2026, and launched a national ad campaign in October built around spending bitcoin instead of holding it. Right now, though, it means bitcoin is the smallest and weakest part of Block's business, even as the company asks regulators to trust it with a bank charter. Block is pursuing an industrial bank charter for a unit it calls Builders Bank, which would offer custody and fiduciary services for bitcoin, and regulators weigh compliance history when they decide those applications. A $764 million settlement is not the kind of history that helps.
So the scoreboard reads like this. Block is a healthy company that just had a strong quarter, and it is also a company that agreed to pay more than that quarter's profit to make a criminal charge go away, for problems regulators say go back years. The bitcoin business is shrinking on purpose, the compliance bill is growing by accident, and the bank charter Block wants will be judged partly on how it handles both. Traders who use Cash App to buy bitcoin do not need to do anything differently today, but they should know what kind of company is holding the other end of the trade.
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Author: Rowan Marrow
Seattle Newsroom
GlobalCryptoPress | Breaking Crypto News
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