The payments company Block Inc. which is led by Jack Dorsey, says it is negotiating with New York state regulators to settle claims over its Anti-Money Laundering (AML) and Bitcoin initiatives.
Block in Talks with New York Regulators
Block stated on February 24 that it was “continuing negotiations” with the New York State Department of Financial Services (NYDFS) over “among other things, aspects of its Bank Secrecy Act/Anti-Money Laundering and Bitcoin programs.”
The company is talking with NYDFS to see if they can resolve this problem on reasonable terms,” according to the statement.
The filing said that Dorsey’s Block faces several legal, regulatory, and tax-related issues including settlements, continuous negotiations, and investigations.
The company further claimed that although NYDFS suggested settlement terms in January and negotiations were in progress the filing lacked any specifics.
Block said it also owes money for this as well, but it views the amount as not very important to its 2024 financial statements.
Several money transmission regulators from US states investigated Block between January 2021 and March 2023; allegedly, their investigation revealed flaws in the company’s AML Program, particularly about compliance with the Bank Secrecy Act.
Block Inc. Faces Multiple Investigations and Fines
In January Block signed a settlement agreement with several state money transfer authorities, but New York was not one of them.
Block did not admit or deny doing anything wrong but agreed to pay $80 million in penalties and settle with several state money transmission authorities over these shortcomings.
It expects to make the payment by February 2025, but it hasn’t mentioned a specific date, especially since February is almost over
As part of the settlement, Block has to hire an outside consultant to look over and improve its AML Program, and a Compliance Management Committee will monitor the implementation of remedial action.
In January the Consumer Financial Protection Bureau also looked at Cash App’s handling of consumer complaints and disputes.
Block paid around $55 million fine and agreed to reimburse Cash App affected users between $75 million and $120 million.
The company is also entangled in a dispute with the San Francisco Treasurer and Tax Collector because they audited the company’s tax returns from 2020 to 2022 and claimed more taxes were due on Bitcoin-related income.
