Block Agrees in Principle to $764M DOJ AML Settlement
Block has agreed in principle to pay $764 million, after credits on a roughly $964 million gross figure, to resolve a DOJ probe into its AML controls. A Bank Secrecy Act charge would be deferred for three years, and the sum exceeds Block's $566 million Q3 profit.
Resolving a U.S. Justice Department investigation into its anti-money-laundering controls will cost Block $764 million under an agreement in principle disclosed in a November 3 SEC filing. The deal was reached in October and is not yet final.
Under the proposed terms, the DOJ would defer for three years a criminal charge alleging that Block failed to maintain an effective AML program, as required under the Bank Secrecy Act. A deferred charge works something like a probationary hold: rather than being prosecuted straight away, the charge is set aside for the length of the deferral period.
The headline number has two layers. The gross monetary component is roughly $964 million, and credits for earlier regulatory settlements bring that down to about $764 million. Block said in the filing that it has already set aside the $764 million.
That sum is larger than the $566 million profit Block reported for the third quarter, which means the settlement outweighs a full quarter of earnings.
An investigation that began in 2023
The DOJ and SEC began examining Block's compliance practices and related disclosures in 2023, following a short-seller report from Hindenburg Research. That report alleged Cash App inflated user numbers by counting duplicate and fraudulent accounts, and that weak identity checks let criminals use the platform for scams and money laundering.
The two inquiries then diverged. The SEC closed its separate investigation in March without recommending enforcement action, leaving the Justice Department matter as the one that has now produced a proposed resolution.
Pressure elsewhere in the business
The settlement arrives alongside weaker bitcoin results. Block's bitcoin gross profit fell 50% to $52 million in the third quarter, largely because of lower transaction fees tied to Cash App fee cuts. Overall gross profit still rose 22% to $3.24 billion, so the wider business grew even as the bitcoin line shrank.
Block's Q3 2026 shareholder letter is also on file with the SEC.
What it means
Because the agreement exists in principle only, its terms could still change before it is finalized, although Block has already set aside the full $764 million. For payments and consumer-facing crypto firms, the case is a reminder that the quality of an AML program can become a criminal matter under the Bank Secrecy Act, and that a short-seller report can be the opening move in a multi-year federal inquiry. Block now carries a three-year deferred charge into a period in which its bitcoin profit line has been cut in half.
