- Block is paying to close a three-year probe. Jack Dorsey’s payments company has agreed in principle to pay $764 million to resolve a Justice Department investigation into its anti-money-laundering controls, according to a November 3 SEC filing viewed by CoinDesk. That is about 1.35 times the $566 million profit Block reported for the third quarter, by our calculation.
- The deal would defer a criminal charge. The agreement, reached in October, would defer for three years a charge alleging Block failed to maintain an effective anti-money-laundering program under the Bank Secrecy Act. The gross monetary component is about $964 million, reduced to $764 million after $200 million in credits for earlier regulatory settlements, and Block has already set aside the lower amount.
- Bitcoin is earning Block less. Bitcoin ecosystem gross profit fell 50% to $52 million from $104 million a year earlier, while bitcoin revenue declined 11% to $1.8 billion, mainly because Block cut fees on certain bitcoin transactions on Cash App. Overall gross profit still rose 22% to $3.24 billion on stronger lending and payments activity.
- Investors looked past the settlement. Block shares rallied more than 6% after hours after adjusted earnings of $1.13 per share beat the $1.03 LSEG estimate and revenue of $6.72 billion topped the $6.59 billion consensus, and the company raised its full-year guidance, according to CNBC.
What Happened?
The investigation dates to 2023, when the Justice Department and the SEC began examining Block’s compliance practices and related disclosures after a report by short seller Hindenburg Research. Hindenburg alleged Cash App inflated user numbers by counting duplicate and fraudulent accounts and that weak identity checks let criminals use the platform for scams and money laundering. The SEC closed its separate investigation in March without recommending enforcement action. In April 2025, New York’s financial regulator fined Block $40 million after finding a backlog of suspicious transaction alerts had grown from about 18,000 in 2018 to more than 169,000 by 2020.
Why It Matters?
Because Block has already set aside the $764 million, the settlement would clear a long-running legal overhang dating to 2023, and shares still rose on results day. The deferred prosecution structure means Block avoids a conviction if it meets the agreement’s terms, but it also keeps its compliance program under scrutiny for three years. The bitcoin numbers show the trade-off of cutting fees to stay competitive: bitcoin revenue fell only 11%, but gross profit halved. With lending and payments driving 22% overall gross profit growth, bitcoin is a shrinking part of Block’s profit story for now.
What’s Next?
The agreement is still in principle, so investors will watch for a final resolution and any court approval of the deferred prosecution terms. The New York regulator also found that one Block screening system did not automatically block bitcoin transfers to wallets linked to terrorism financing until exposure exceeded 10%, the kind of control any monitoring will focus on. On the business side, the key question is whether lower bitcoin fees bring enough extra activity on Cash App to rebuild bitcoin gross profit, alongside the raised full-year guidance.
