The Jack Dorsey-led payments firm Block Inc. says it is negotiating with New York state regulators to settle allegations over its Anti-Money Laundering (AML) and Bitcoin programs.
Block said in a Feb. 24 filing with the Securities and Exchange Commission that its “continuing negotiations” with the New York State Department of Financial Services (NYDFS) over “among other things, aspects of its Bank Secrecy Act/Anti-Money Laundering and Bitcoin programs.”
“The company is engaging in conversations with NYDFS to determine whether this matter can be settled on acceptable terms,” it added.
Dorsey’s Block is involved in multiple legal, regulatory, and tax-related matters, including settlements, ongoing negotiations, and investigations, the filing stated.
The company added that in January, NYDFS proposed settlement terms, and discussions were ongoing, but no details were provided in the filing. Block added that it has accrued a liability for this matter but considers the amount not material to its 2024 financials.
SEC
Block was investigated by money transmission regulators from multiple US states between January 2021 and March 2023, with an examination allegedly finding deficiencies in the firm’s AML Program, particularly concerning compliance with the Bank Secrecy Act.
A settlement agreement was made between Block and multiple state money transmission regulators in January, but New York was not among them.
Block did not admit or deny any wrongdoing but agreed to settle with various state money transmission regulators over these deficiencies and agreed to pay $80 million in penalties, with payments expected to be completed by February 2025.
As part of the settlement, Block must appoint an independent consultant to review and improve its AML Program, and a Compliance Management Committee will oversee the execution of corrective measures.
Related: NYDFS chief’s advice for crypto firms: ‘Never surprise your regulator’
The Consumer Financial Protection Bureau also investigated Cash App in January over its handling of customer complaints and disputes.
Block paid a $55 million civil penalty and agreed to pay $75 million to $120 million in restitution to affected Cash App customers.
The firm is also embroiled in a tussle with the San Francisco Treasurer and Tax Collector, which audited the firm’s tax receipts tax from 2020–2022 and claimed additional taxes were owed on Bitcoin-related revenue .
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