Block Inc. has been fined by the New York Department of Financial Services (NYDFS) for significant shortcomings in its anti-money laundering (AML) and compliance practices, particularly within its Cash App platform.

While the company has been licensed for money transmission since 2013 and virtual currency services since 2018, regulators uncovered "critical gaps" in its Bank Secrecy Act/AML program.

According to the NYDFS, Block failed to conduct proper customer due diligence, lacked adequate risk-based controls, and did not monitor transactions effectively or in a timely manner. These lapses were particularly concerning in relation to high-risk Bitcoin activity, where largely anonymous transactions were processed with minimal oversight. A spike in growth between 2019 and 2020 further compounded the issue, creating a backlog of unreviewed alerts that went unresolved for an extended period.

As part of the settlement, Block will not only pay a fine but also bring in an independent monitor to evaluate its regulatory compliance and corrective actions. Adrienne Harris, Superintendent of Financial Services, emphasized that compliance operations must scale with business growth, stating that the rapid expansion of Cash App without proper oversight "created risk and vulnerabilities" in violation of New York’s financial regulations.