Block sets aside $764 million for Cash App money-laundering deal

Block, the payments company led by chief executive Jack Dorsey, has agreed in principle to pay about $764 million to settle a US Justice Department investigation into weak money-laundering checks at Cash App. The firm disclosed the deal in a filing on 3 November 2026.

The terms sit in Block's quarterly report to the Securities and Exchange Commission. Under the deal, the Justice Department would defer a criminal charge for three years, the filing said, over claims the company failed to run an effective anti-money-laundering program. US banking law, the Bank Secrecy Act, requires one. The law makes financial firms watch for and report suspicious transactions, the backbone of American anti-money-laundering rules. Regulators say Block's checks did not keep pace with how fast Cash App grew.

What the $764 million covers

That $764 million is the net cost of a deferred prosecution agreement, a deal that pauses a criminal charge while a company proves it has cleaned up. The gross figure is higher, about $964 million, before credit for earlier regulatory penalties Block has already paid. If the company meets the terms over three years, the Justice Department has said it will drop the charge for good.

Block has already booked the money. Not final, though. In the same filing, the company warned that a signed agreement is not certain, and that its losses could run higher than the amount set aside.

The reserve did not appear all at once. Earlier filings this year show it building, from about $240 million by the end of March to $526 million by the end of June, before the October deal fixed the net figure near $764 million. Each step marked the company's own rising estimate of what the case would cost.

A deferred prosecution agreement is a middle path. Prosecutors file a charge but hold off on pressing it, so the company avoids a conviction as long as it behaves and pays. The roughly $200 million gap between the gross $964 million and the net $764 million reflects penalties Block already handed to other regulators, which the Justice Department agreed to count toward the total.

Why Cash App drew scrutiny

Cash App lets people send money and buy bitcoin from a phone, and it counts tens of millions of users. That reach is part of why regulators looked hard at its controls. The checks fell short. The Justice Department and the SEC began examining the company's compliance in 2023, after short-seller Hindenburg Research published a report on Cash App.

Hindenburg claimed Cash App inflated its user numbers by counting duplicate and fake accounts, and that weak identity checks let criminals move money through the platform. Block called the report inaccurate and misleading at the time. The SEC closed its own investigation in March 2026 without recommending any action.

New York's financial regulator had already acted. In April 2025 it fined Block $40 million and made the company bring in an outside monitor. Its order described a backlog of suspicious-activity alerts that grew from about 18,000 in 2018 to more than 169,000 by 2020. One screening system, the regulator found, did not automatically stop bitcoin transfers to wallets tied to terrorism financing until a wallet's exposure passed 10 percent.

A shrinking bitcoin business

Block's bitcoin unit had a hard quarter. Gross profit from the bitcoin business fell 50 percent to $52 million, down from $104 million a year earlier, the company's shareholder letter showed. Revenue from the unit dropped 11 percent to $1.8 billion. Block put the fall down to its own choice to cut fees on some bitcoin transactions in Cash App. Cash App is one of the simplest ways for ordinary Americans to buy bitcoin, and those purchases have long brought in large revenue but thin profit, because the company passes most of the bitcoin cost straight through to the buyer. Lower fees trim the profit that is left. Block made the change itself and pointed to it as the main reason the unit's profit fell.

Cash App holds customers' bitcoin for them, a custodial setup unlike a self-custody wallet, where the user keeps the keys and the risk. That design is part of why anti-money-laundering rules land on Block rather than on its customers.

Elsewhere the company did better. Total gross profit rose 22 percent to $3.24 billion, helped by Cash App's lending and payments. Net income was $566 million for the quarter. The bill is bigger. Coinbase, another listed crypto firm, leaned on gains from the crypto it holds to pad its own third-quarter profit, a reminder that these businesses rise and fall with the market.

What to watch

A few things remain open. The agreement still has to be signed, and Block has said that may not happen. If it falls through, the Justice Department could take the company to court instead. For the next three years, if the deal holds, Block will have to show its anti-money-laundering systems work, under the eye of the authorities and a monitor. An outside monitor, like the one New York imposed in 2025, reports back on whether the fixes are real rather than just promised.

For Cash App users, little changes day to day. Cash App kept running. People can still buy, hold and sell bitcoin through the app while the deal is worked out. What the case shows is narrower than some headlines suggest. It is not a finding that Cash App is a tool for criminals. It is a finding that the company's controls were not strong enough to stop misuse, which is a different thing.