Block, Inc. (formerly Square Inc.) has agreed to pay $40 million to settle an investigation with New York’s financial regulator, the Department of Financial Services (NYDFS).
The investigation uncovered significant gaps in the company’s anti-money laundering (AML) compliance, particularly related to its Cash App, which facilitates Bitcoin transactions.
Regulatory Issues Over Bitcoin Transactions
The NYDFS revealed that Block’s compliance functions failed to adequately keep up with the company’s rapid growth, leaving the firm vulnerable to money laundering and illicit activities. Among the concerns raised was Block’s insufficient scrutiny of high-risk Bitcoin transactions, which allowed largely anonymous transactions to be processed without proper checks.
Block’s Cooperation with Investigations
Despite the issues, NYDFS noted that Block cooperated with the investigation and has since taken corrective steps. The settlement mandates that Block, Inc. hire an independent monitor to oversee compliance improvements, ensuring that it aligns with the regulatory requirements moving forward.
This settlement serves as a warning for other cryptocurrency companies about the importance of maintaining robust AML compliance systems, especially as businesses grow and diversify their services. NYDFS has long been active in regulating the crypto industry, having implemented the BitLicense regime in 2015 to enforce stringent rules for digital asset companies operating in New York.
Kosta Gushterov
Reporter at Coindoo
Kosta has been a part of the team since 2021 and has solidified his position with a thirst for knowledge, incredible dedication to his work and a “detective-like” mindset. He not only covers a wide range of trending topics, he also creates reviews, PR articles and educational content. His work has also been referenced by other news outlets.
Source: https://coindoo.com/block-inc-settles-for-40-million-after-aml-lapses-in-cash-apps-bitcoin-transactions/