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Block Inc. Pays $40 Million for AML Blunders: A Comedy of Errors in Crypto!

BBG News

Ah, mesdames et messieurs! Gather ’round as we unveil the latest farce in the grand theater of finance! Block, Inc., the illustrious purveyor of Cash App, has struck a deal worth a staggering $40 million with the New York Department of Financial Services (NYDFS). This hefty sum comes after a thorough investigation revealed their woeful neglect of anti-money laundering (AML) compliance. 🎭💰

It appears that Block’s AML program was akin to a leaky ship, particularly when it came to the handling of Bitcoin transactions and the due diligence of its customers. One might say they were more interested in the gold than the guard! 🏴‍☠️

Block Inc. Settles for $40 Million Over AML Failures

According to the NYDFS, Block’s compliance program was riddled with flaws, much like a poorly written play. The regulators pointed out that they had failed to erect sufficient barriers against the nefarious activities of money launderers. Oh, the irony! A company dealing in digital currency, yet unable to keep its own house in order! 😂

The investigation revealed that customer due diligence was as absent as a good punchline in a tragedy, especially concerning Bitcoin transactions, which allowed a cavalcade of anonymous transactions to slip through the cracks. How delightful! 🎩

Adrienne A. Harris, the Superintendent of NYDFS, quipped, “Compliance functions require growth in order to scale with the size and scale of the company.” Indeed! One might wonder if they were too busy counting their coins to notice the growing backlog of transaction alerts and responses. A classic case of too much volume and not enough vigilance! 📈

Previous Settlements and Efforts to Improve Compliance

This fine marks the second act in Block’s recent saga of AML missteps. Earlier this year, they paid a princely sum of $80 million to 48 state regulators in January. Meanwhile, another player in this grand game, OKX, found itself in hot water with a $1.2 million fine in Malta. What a tangled web we weave! 🕸️

In a statement, Block proclaimed, “Cash App has invested large amounts of both financial and other capital into compliance remediation and improvements.” Yet, they seemed to dance around the findings of the investigation, assuring customers that they were indeed taking notes and working on their compliance mechanisms. A valiant effort, but will it be enough? 🤔

As part of the settlement, Block’s management must now appoint an independent monitor, a sort of compliance watchdog, to oversee their progress. The NYDFS will keep a watchful eye, ensuring that Block adheres to the regulatory expectations moving forward. A delightful twist in this ongoing drama! 👀

Cash App Under Scrutiny as Crypto Regulations Tighten

Block, Inc. operates Cash App, a peer-to-peer payment service that allows users to buy, sell, and transfer Bitcoin. Since 2018, Cash App has been under the watchful gaze of the NYDFS as a virtual currency business. With the cryptocurrency market booming, Block has found itself in the spotlight, facing increased scrutiny. But fear not, dear audience! Jack Dorsey has warned that limiting Bitcoin’s use to a mere digital equivalent of gold could lead to its “irrelevance.” A cautionary tale indeed! ⚖️

In addition to settling this latest AML case, Block has recently unveiled a new open-source toolkit designed to help companies manage their Bitcoin treasury holdings. This toolkit includes a corporate Bitcoin holdings dashboard and a real-time BTC-to-USD price quote API. A noble endeavor, but will it be enough to redeem their tarnished reputation? Only time will tell! ⏳

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2025-04-10 19:43

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