The company would pay $764 million of the amount in the agreement to resolve U.S. charges that its anti-money laundering program was ineffective.

The DOJ would “dismiss with prejudice the deferred charges” if Block complies with the obligations specified in the agreement, the company said in its filing. Block said it “cannot predict the final terms of the resolution, and it is reasonably possible that those terms could result in losses” exceeding the $764 million it has accrued for the settlement.

In March 2023, a short seller firm, Hindenburg Research, raised issues about Block's fraud monitoring with the publication of a report. The report alleged that Cash App was a platform for criminal activity with lax fraud controls that resulted in duplicative accounts and fraudulent payments.

There has been no stated connection between the regulatory action and the firm’s report. Hindenburg announced its closure in early 2025.

In May, Block disclosed that the DOJ had presented terms to resolve the issues, and that the company had made a counterproposal to the department in April.

Block had “a pattern of disregard” for anti-money laundering and “know your customer” laws, according to the Hindenburg report, which the firm said was based on more than a dozen interviews with former Block employees during its two-year investigation.

Block, based in Oakland, California, disputed the report and threatened legal action, calling it “factually inaccurate and misleading.”

The Securities and Exchange Commission told Block in March that it had ended its investigation of the matter and declined to pursue “an enforcement action,” Block said in the filing Tuesday.

Source link