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 or terrorism financing.

Block to Refund $120 Million, Pay Penalties

As part of the settlement , 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.”

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.