Block Faces $764M DOJ Settlement as Bitcoin Profits Fall 50%

Jack Dorsey’s payments firm Block has reached a preliminary agreement to pay $764 million to settle a U.S. Justice Department investigation into its anti-money-laundering practices. The proposed payment exceeds the company’s $566 million third-quarter profit.
The deal was agreed in October and revealed in a November 3 filing with the U.S. Securities and Exchange Commission (SEC), reviewed by CoinDesk. Under the arrangement, prosecutors would defer a criminal charge for three years over allegations that Block failed to establish and maintain an effective anti-money-laundering program under the Bank Secrecy Act.
The settlement includes a gross financial obligation of approximately $964 million. After accounting for credits from previous regulatory settlements, the amount falls to $764 million. Block confirmed in its filing that it has already reserved funds to cover the adjusted payment.
Federal authorities began investigating Block in 2023, alongside a separate SEC review, following allegations about the company’s compliance procedures and public disclosures. The inquiries came after a report from short seller Hindenburg Research. The SEC concluded its investigation in March without recommending enforcement action.
Hindenburg alleged that Cash App overstated its user base by including duplicate and fraudulent accounts. The report also claimed that inadequate identity verification procedures allowed criminals to exploit the platform for scams, money laundering and other unlawful transactions.
Block dismissed the allegations, describing the report’s conclusions as inaccurate and misleading.
In April 2025, New York’s financial regulator imposed a $40 million penalty on Block after identifying major weaknesses in its compliance infrastructure. The regulator found that the company’s backlog of suspicious activity alerts increased from approximately 18,000 in 2018 to more than 169,000 by 2020.
The investigation also revealed that one of Block’s transaction-screening systems failed to automatically prevent Bitcoin transfers to wallets associated with terrorist financing until the exposure reached more than 10%.
Meanwhile, the proposed DOJ settlement comes as Block’s Bitcoin trading business faces declining profitability. Its latest quarterly filing showed a significant drop in gross profit generated by Bitcoin activity on Cash App.

Block’s Bitcoin Gross Profit Drops 50% in Q3

Block reported that gross profit from its Bitcoin ecosystem declined 50% year over year to $52 million in the third quarter, compared with $104 million during the same period last year. Bitcoin revenue also fell 11% to $1.8 billion.
The company attributed most of the profit decline to lower fees on selected Bitcoin transactions, following its decision to make trading cheaper for Cash App users.
Despite the weakness in its Bitcoin business, Block’s broader operations continued to expand. Total gross profit increased 22% to $3.24 billion, supported by stronger performance in Cash App’s lending and payment services.