Block, the parent company of Cash App, has agreed to pay an $80 million fine as part of a settlement with 48 state financial regulators over violations of the Bank Secrecy Act (BSA) and anti-money laundering (AML) regulations.

The state regulators found that Block failed to meet certain customer due diligence requirements, potentially allowing its services to be used for money laundering Money Laundering Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Money laundering is a blanket term to describe the process by which criminals disguise the original ownership and proceeds of criminal conduct by making such proceeds appear to be derived from a legitimate source.Money laundering is an issue that traverses countless industries and sectors, which includes the financial services space. Though criminal money may be successfully laundered without the assistance of the financial sector, billions of dollars’ worth of criminally derived money are laund Read this Term or terrorism financing.

Block to Refund $120 Million, Pay Penalties

As part of the settlement Settlement Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Settlement in finance refers to the process when a buyer makes payment and receives the agreed-upon services or goods. The term is used on exchanges such as New York Stock Exchange (NYSE) when security changes hands. When the asset is transferred and placed in the new buyer's name, it is considered settled. This process could take a few hours or several days after a trade is made. It depends on the clearance process. In the United States, the settlement date for marketable stocks is usually 2 Read this Term, Block will also hire an independent consultant to review its BSA/AML program and submit a report to the states within nine months. The company will have 12 months to address any deficiencies identified in the review.

In a separate action, the Consumer Financial Protection Bureau (CFPB) has ordered Block to refund up to $120 million to consumers and pay a $55 million penalty to the CFPB's victims relief fund. The CFPB found that Cash App, Block’s mobile payment service, had weak security protocols and allowed fraudulent activity to proliferate.

“Cash App created the conditions for fraud to proliferate on its popular payment platform,” said CFPB Director Rohit Chopra. “When things went wrong, Cash App flouted its responsibilities and even burdened local banks with problems that the company caused.”

Commenting on the matter, Block Investor Relations stated on X: “We strongly disagree with the CFPB’s mischaracterizations. We made the decision to settle this matter in the interest of putting it behind us and focusing on what’s best for our customers and our business.”

The team added: “We don’t expect these resolutions to affect our ability to serve our customers or execute on our business or product strategy.”

We have reached agreements with the CFPB and state money transmission regulators on previously disclosed matters principally related to certain aspects of Cash App’s historical customer service and regulatory compliance programs. The final settlement amounts are a penalty of $55M…

— Block Investor Relations (@BlockIR) January 16, 2025

CFPB Orders Block to Improve Dispute Resolution

The investigation revealed that Block’s process for handling unauthorized transaction disputes was inadequate. Block directed users to their banks for transaction reversals, but the company would deny these requests. The CFPB also found that Block employed tactics to suppress users from seeking help, reducing the company’s costs.

In addition to the financial penalties, the CFPB has ordered Block to implement 24-hour live customer service, fully investigate unauthorized transactions, and provide timely refunds where appropriate.