- Block Inc. settles for $40 million over Cash App compliance failures related to anti-money laundering.
- Despite legal issues Block Inc. reports strong financial growth and steady performance in 2024.
- Cash App continues to grow with 57 million active users and new services despite regulatory challenges.
Block Inc. has agreed to a $40 million settlement with the New York Department of Financial Services (NYDFS). The payment resolves allegations of compliance failures connected to its Cash App platform.
The NYDFS investigation found that Block failed to follow proper anti-money laundering rules. The company did not complete proper checks on customers. It also failed to monitor and report suspicious activities. Investigators found Block did not screen high-risk Bitcoin transactions properly. Block worked with regulators but did not admit to any wrongdoing during the process.
Longstanding Regulatory Issues
Block initiated negotiations with the NYDFS back in 2023. The company made public disclosures regarding the investigation to both the U.S. Securities and Exchange Commission and the public.
Earlier this year, Block agreed to pay $80 million to several state regulators. These penalties came from similar anti-money laundering issues. Regulators are keeping a close watch on Block as it continues to grow its financial services.
Despite the legal troubles, Block has reported strong financial results. The company recorded a 4.5% growth in revenue that reached $6.03 billion during 2024. Earnings per share experienced a 51% boost leading to a new rate of $0.71. The company has demonstrated stability through its steady business operations while facing regulatory obstacles.
Cash App Remains Central to Growth
Cash App plays a big role in Block’s overall growth. In the fourth quarter of 2024, it generated $1.38 billion in gross profit. Early in 2024, Cash App had over 57 million active users each month.
The app has supported Bitcoin transactions since 2018. In 2023, it added tax reporting tools to help users manage crypto taxes. Block is working to turn the Cash App into a full banking service. The company faces tough competition from other fintech firms like Robinhood. Rivals have started offering high-interest accounts and new savings features.
Block is adding new services to keep up. These include savings accounts, debit cards, and short-term loans. The company also provides buy now, pay later options through Afterpay.
Building Customer Trust Remains Key
Block still faces trust issues with its users. Earlier this year, regulators ordered Cash App to refund up to $120 million. This came after failures in handling fraud complaints from customers.
By December, 2.5 million users had adopted direct deposit with Cash App. These users are more likely to use other financial services. Block continues to focus on growing this base while facing regulatory pressure.
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