Jack Dorsey's payment company Block has been fined again! The lack of AML compliance has resulted in a fine of 40 million dollars by New York authorities.

The digital payment company Block Inc., co-founded by Twitter's Jack Dorsey, now known as X, was fined $40 million by the New York State Department of Financial Services (NYDFS) due to deficiencies in its Cash App regarding compliance with crypto assets and AML. This is the second time this year that the company has been penalized for similar issues.

Cash App violates consumer protection and Money Laundering regulations

According to a report by Bloomberg on April 10, the NYDFS investigation found that Block's mobile payment service Cash App had the following issues in risk management:

Ineffective monitoring of high-risk Bitcoin transactions

Due diligence on user identity is clearly insufficient.

Too slow in identifying and reporting suspicious activities.

Violation of multiple consumer protection regulations in New York State

Regulatory authorities emphasized: "These types of shortcomings not only endanger consumers, but also pose potential risks to the overall financial system."

Although Block has cooperated with regulatory authorities to address this case and stated that this settlement mainly pertains to past compliance procedures, the company did not admit to any wrongdoing in the settlement documents. According to the data from the United States Securities and Exchange Commission (SEC), Block has been negotiating with NYDFS since 2023.

(The fintech company Block, led by Jack Dorsey, is under investigation by federal authorities)

This is already the second time this year that Block has been penalized for compliance issues. Earlier this year, the company was jointly fined $80 million by multiple state regulators for violations related to its anti-money laundering program.

As of now, Block has paid over $120 million in fines this year for similar issues, highlighting the company's challenges in crypto compliance.

Cash App 2024's financial performance is impressive, with a continuously expanding user base.

Despite regulatory challenges, Block's overall performance remained strong at the end of 2024. The company's revenue increased by approximately 4.5% year-on-year, reaching $6.03 billion, and earnings per share surged by 51% to $0.71. The total transaction volume for merchants also rose by 10%, reaching $61.95 billion.

However, despite strong revenues, Block (XYZ) still struggles against concerns of an overall economic downturn. Google Finance data shows that its stock price has dropped to $52.9 year-to-date, a decline of 39%.

However, Cash App, as its main growth driver, recorded a gross profit of 1.38 billion USD in the fourth quarter of 2024, with over 57 million monthly active users at the beginning of 2024.

Cash App has supported Bitcoin purchases since 2018 and integrated the crypto tax software TaxBit in 2023 to help users simplify the tax filing process, demonstrating that even under regulatory pressure, Block continues to position itself in the crypto assets market.

This article discusses that Jack Dorsey's payment company Block has been fined again! The lack of AML compliance has resulted in a 40 million dollar fine imposed by New York authorities. First appeared in Chain News ABMedia.