Block, the financial technology firm led by Jack Dorsey, has agreed in principle to pay $764 million to resolve a US Department of Justice (DOJ) investigation into its anti-money-laundering controls. The amount exceeds Block’s third-quarter profit, which stood at $566 million.
DOJ settlement and regulatory scrutiny
The proposed agreement, disclosed in a November 3 regulatory filing, would defer for three years a criminal charge alleging that Block failed to maintain an effective anti-money-laundering program under the Bank Secrecy Act. Block accrued the full $764 million, after credits for earlier settlements, and acknowledged the possibility of additional losses beyond this amount. Final approval from authorities is still pending.
The company has challenged the government’s assessment, disputing both its basis and methodology. The gross figure before credits was $964 million, with previous regulatory settlements leading to the final proposed sum.
Block disputed the conclusions of the government’s assessment and stated that losses above its reserved amount remain “reasonably possible.”
In addition to federal scrutiny, Block also faced state-level actions. In April 2025, the New York Department of Financial Services fined the company $40 million after detecting a significant backlog of suspicious activity alerts and weaknesses in its screening system for bitcoin transfers. A multistate settlement in January 2025 added $80 million, and these amounts contributed to a $200 million credit against the DOJ figure.
The deferred prosecution structure mirrors a path previously taken by Binance in 2023, allowing Block to avoid a conviction provided it complies with the agreement’s terms for three years.
Mini dictionary: New York Department of Financial Services (NYDFS), the regulatory authority overseeing financial services and products in New York, including banking, insurance, and virtual currencies.
Origins of the investigation
The investigation into Block began in March 2023 after Hindenburg Research, a prominent short seller, published allegations that the company’s Cash App division had inflated user numbers through duplicate and fraudulent accounts. The report also claimed that weak identity checks allowed illicit actors to use the platform for scams and money laundering. Block called these claims inaccurate and misleading.
The DOJ and Securities and Exchange Commission (SEC) launched investigations into Block’s compliance practices following the report. The SEC closed its inquiry in March 2025 without recommending enforcement action.
Currently, Block is seeking an industrial bank charter for its subsidiary, Builders Bank, which aims to provide custody and fiduciary services for bitcoin. Bank regulators consider compliance records during the charter evaluation process.
Financial performance and bitcoin strategy
Despite regulatory challenges, Block reported a 22% increase in company-wide gross profit for the quarter, reaching $3.24 billion. Cash App, one of Block’s main products, saw gross profit rise 27% to $2.07 billion, while the Square business grew by 14% to $1.16 billion.
| Business Unit | Gross Profit Q3 | Year-on-Year Change |
|---|---|---|
| Cash App | $2.07 billion | +27% |
| Square | $1.16 billion | +14% |
| Bitcoin | $52 million | -50% |
Bitcoin operations, however, diverged from this trend. Gross profit from the bitcoin division dropped 50% to $52 million, compared with $104 million in the same period last year. Bitcoin revenue also declined 11% to $1.8 billion.
Block attributed the drop in bitcoin profit to its strategic decision to reduce fees on certain Cash App bitcoin transactions, emphasizing the use of bitcoin as a payment method rather than a trading asset. The company enabled nearly 1 million Square merchants for Lightning payments in May and waived processing fees on bitcoin transactions until 2026. In October, Block launched a national campaign focused on spending bitcoin.
Mini dictionary: Lightning payments refer to Bitcoin’s Lightning Network, a second-layer protocol that enables faster and cheaper bitcoin transactions by processing them off-chain before settling on the main blockchain.
Revenue from customer bitcoin sales, which Block books at gross value, declined as bitcoin prices dropped from approximately $114,000 to $70,000 over the past year.
As of the first quarter, Block reported holding 28,355 BTC in its treasury and customer accounts, including about 9,000 BTC in corporate holdings. The company continues to allocate 10% of its bitcoin gross profit to further bitcoin purchases.
Block highlighted its move to cut fees on certain bitcoin transactions, aiming to boost adoption of bitcoin as a payment rail rather than a traditional trading product.
