Block Reaches Tentative $764 Million Settlement with DOJ Over AML Failures
Jack Dorsey’s payments company, Block, has reached an in-principle agreement to pay $764 million to resolve a federal investigation into alleged shortcomings in its anti-money laundering controls. The proposed deal, disclosed in the company’s quarterly filing, would settle a deferred prosecution agreement with the U.S. Department of Justice.
The agreement follows years of scrutiny regarding Block’s compliance practices, particularly concerning its Cash App platform.
Mixed Financial Results Alongside Settlement News
The announcement of the tentative settlement comes as Block reported stronger-than-expected third-quarter earnings, posting $3.2 billion in gross profit and raising its 2026 outlook. However, the company also cautioned that the final cost of the DOJ settlement could potentially exceed initial expectations.
Bitcoin Business Sees Significant Profit Decline
The news arrives amidst a sharp downturn in Block’s Bitcoin business. Gross profit from its Bitcoin ecosystem plummeted 50% year-over-year to $52 million in the third quarter, despite the company’s overall robust financial performance. This decline was primarily attributed to reduced fees on certain Bitcoin transactions processed through Cash App.
Details of the Deferred Prosecution Agreement
Under the proposed agreement, Block would defer prosecution for three years over allegations that it failed to maintain an effective anti-money laundering program, in violation of the Bank Secrecy Act. The company would be required to meet specific obligations throughout this period. If Block fully complies, prosecutors would seek to dismiss the charges. The resolution, however, remains contingent on final agreement terms and court approval.
The settlement carries a gross monetary component of approximately $964 million. Credits for prior regulatory resolutions are expected to reduce the net payment to around $764 million. Block had already set aside $764 million for this matter as of September 30, but warned that the final cost could be higher.
Investigation Stemmed from Short Seller Allegations
The DOJ’s investigation originated in 2023, following allegations raised by short seller Hindenburg Research concerning Block’s compliance practices and disclosures. Block has previously rejected these allegations as inaccurate and misleading. In a separate matter, New York’s financial regulator fined the company $40 million in 2025 for compliance failures.
Broader Business Performance Outpaces Bitcoin Woes
While the Bitcoin segment experienced a significant profit dip, Block’s broader business demonstrated strong growth. Total gross profit rose 22% year-over-year to $3.24 billion. Cash App’s gross profit increased by 27% to $2.07 billion, while Square’s gross profit saw a 14% rise. Quarterly net income climbed to approximately $566 million.
Block also revised its full-year 2026 gross profit forecast upward to $12.63 billion, indicating an anticipated growth of roughly 22%. The proposed DOJ settlement introduces a significant legal expense, juxtaposed against a mixed earnings report where the Bitcoin business’s profitability is declining, even as Cash App and Square contribute to overall company expansion.
