Block Reaches Preliminary $764 Million AML Settlement With US Justice Department

Block, the company behind Cash App and Square, has reached an agreement in principle with the US Department of Justice on a proposed deferred prosecution agreement covering an anti-money laundering charge, according to its quarterly regulatory filing. The proposed deal would address allegations that the company breached the Bank Secrecy Act by failing to maintain an adequate anti-money laundering compliance program, and would defer the charge for three years.

The arrangement is not yet binding. Block said it remains subject to a final text acceptable to all parties and to court approval. If the company meets all its obligations over the three-year term, prosecutors will ask the court to dismiss the deferred charge with prejudice. Block warned that a breach of the final terms could lead to prosecution on the underlying charge.

What the settlement costs

According to the filing, the arrangement carries an estimated gross financial cost of around $964 million, reduced to approximately $764 million after deductions for earlier regulatory settlements. Block recognized an accrual of $764 million at September 30, 2026, when it held $7.86 billion in cash and cash equivalents. The company said the eventual settlement cost could exceed the amount it has set aside.

The preliminary agreement follows a separate resolution with the New York Department of Financial Services in April 2025, under which Block paid $40 million and agreed to appoint an independent monitor. That consent order set a 12-month monitoring period, which the regulator can extend, to review the company's anti-money laundering controls and oversee corrective actions. In January 2025, Block also paid $80 million to settle similar claims brought by 48 US state financial regulators.

Why monitoring gaps drew scrutiny

New York regulators had identified weaknesses in transaction monitoring and customer due diligence across both fiat and bitcoin activity on Cash App. Those weaknesses included a backlog of unreviewed alerts that grew from around 18,000 in 2018 to more than 169,000 by 2020. The regulator acknowledged remedial steps taken by Block, including hiring compliance staff, limiting the number of accounts per user, and tightening controls to stop excluded individuals from rejoining the service.

For workers in anti-money laundering and financial crime roles, the case points to how quickly alert backlogs become regulatory findings, and how remediation work translates into hiring. Block's own account shows the response involved adding compliance personnel and reworking controls, the kind of work that sits with transaction monitoring teams, investigators and customer due diligence specialists at payments and fintech firms.

The proposed penalty also shows that state and federal actions can stack. Block's net figure reflects deductions for earlier settlements, meaning the amount booked now sits alongside money already paid to state regulators and New York authorities. Firms operating in multiple jurisdictions face parallel expectations on monitoring, record keeping and reporting, and each resolution can carry its own monitor, timeline and reporting duties.

What to watch next

The key test is whether the parties finalize terms acceptable to all sides and secure court approval, which would convert the agreement in principle into a binding deferred prosecution arrangement. Block has said the cost could rise above the accrual, so any change in scope or duration would matter to its financial statements. The company also faces the monitor appointed under the New York order and the possibility that the monitoring period is extended.

For compliance teams across payments and digital asset businesses, the sequence of state settlements followed by a federal resolution offers a template that supervisors are likely to cite. Attention will now focus on how quickly Block completes the remaining corrective work and whether the three-year term passes without further enforcement action.