Block, the company behind Cash App and Square, said it has reached an agreement in principle with the US Department of Justice to resolve a federal investigation into alleged shortcomings in Cash App’s anti-money laundering program.

In a quarterly filing with the Securities and Exchange Commission, the company said the proposed resolution would come through a deferred prosecution agreement. Block expects the matter to result in a payment of about $764 million after credits for earlier regulatory settlements, though the arrangement still requires a final agreement and court approval.

Deferred prosecution framework outlined in filing

According to Block’s disclosure, the DOJ would defer for three years a charge that the company failed to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act. If Block complies with the terms during that period, the DOJ would move to dismiss the charge.

The company said the expected gross penalty under the proposed deal is about $964 million. That figure would be reduced to roughly $764 million after accounting for credit tied to prior regulatory settlements. Block also said it had already reserved the full $764 million as of September 30.

Probe followed scrutiny of Cash App controls

The DOJ and SEC began examining Block after short seller Hindenburg Research published a report in March 2023. Hindenburg alleged that Cash App overstated its user numbers by counting duplicate and fake accounts and that weak identity verification allowed criminals to use the service.

Block disputed those claims. The SEC later closed its own investigation in March of this year without recommending enforcement action, according to the company’s filing.

Settlement size exceeds quarterly net income

The proposed payment is larger than Block’s reported third-quarter net income of $565 million. In the same quarter, the company posted $3.2 billion in gross profit.

Cash App generated $2.07 billion in gross profit, up 27% from a year earlier, while Square gross profit rose 14% to $1.16 billion. Gross profit from Block’s Bitcoin business fell 50% to $52 million after the company reduced fees on some Bitcoin transactions conducted through Cash App.

Prior regulatory action and next steps

This is not the first anti-money laundering-related settlement tied to Cash App. In April 2025, Block paid $40 million to New York’s financial regulator over alleged AML lapses at the app.

For now, the DOJ matter is not fully resolved. Block said the agreement remains subject to final documentation and court approval. The next confirmed step is completion of that final agreement, after which the deferred prosecution terms would determine whether the Bank Secrecy Act charge is ultimately dismissed.

Source: dailyhodl.com