Block to Pay $40 Million to Settle New York Compliance Issues
Block Inc. has agreed to pay $40 million to settle claims from the New York Department of Financial Services (NYDFS) regarding inadequate money-laundering safeguards. The NYDFS highlighted issues with Block's management of high-risk bitcoin transactions, allowing anonymous transactions to bypass scrutiny.
Key points include:
- Block must address compliance shortcomings and submit to an independent monitor.
- NYDFS noted rapid growth of Cash App without sufficient compliance measures created vulnerabilities.
- The agreement covers compliance deficiencies identified during examinations for 2021 and 2022.
- Block holds a New York BitLicense since 2018 for digital asset operations.
- The company stated it does not admit to any findings but aims to resolve the issue.
The consent order indicated serious compliance failures that exposed Block to potential exploitation by criminals.