- Jack Dorsey’s fintech company Block reached an agreement in principle with the U.S. Department of Justice in October 2026 to resolve an investigation into shortcomings in its anti-money laundering system.
- The proposed settlement includes a three-year deferred prosecution agreement and an expected net payment of about $764 million after prior regulatory payments.
- Block’s third-quarter gross profit from its bitcoin ecosystem fell 50% from a year earlier to $52 million.
Jack Dorsey’s fintech company Block in October 2026 reached an agreement in principle with the U.S. Department of Justice to resolve an investigation into its anti-money laundering system. The proposed resolution would defer prosecution for three years and require an expected net payment of about $764 million after prior regulatory payments.
Block disclosed the key terms in a filing with the U.S. Securities and Exchange Commission on November 3, 2026. The agreement is not final and still requires approval from the parties and the court.
Proposed agreement would defer prosecution
Under the proposed deferred prosecution agreement, the DOJ would defer for three years charges that Block failed to maintain an effective anti-money laundering program in compliance with the Bank Secrecy Act.
The settlement’s total financial component would be about $964 million. After accounting for prior regulatory payments, Block expects to pay about $764 million. The company had set aside that amount as of September 30, 2026.
If Block meets all its obligations during the three-year period, the DOJ is expected to ask the court to dismiss the deferred charges permanently. Block cautioned that the final terms could result in losses greater than the amount it has reserved.
The investigation began in 2023 after short seller Hindenburg Research published a report alleging that Cash App inflated its user numbers through duplicate and fraudulent accounts. The report also alleged that weak identity-verification procedures allowed the platform to be used for fraud, money laundering and other illicit payments. Block rejected the allegations as inaccurate and misleading.
The SEC concluded its investigation in March 2026 and said it would not recommend enforcement action against Block. In April 2025, however, the New York State Department of Financial Services fined the company $40 million over serious shortcomings in its compliance systems. The backlog of unreviewed suspicious activity reports increased from about 18,000 in 2018 to more than 169,000 in 2020.
Bitcoin gross profit falls 50%
Block’s gross profit from its bitcoin ecosystem fell to $52 million in the third quarter of 2026 from $104 million a year earlier. Revenue from the segment declined 11% to $1.8 billion.
The company attributed the decline in gross profit primarily to its decision to lower fees on certain bitcoin transactions in Cash App. The payment application integrated bitcoin and stablecoins for instant payments in November 2025.
Block’s total gross profit rose 22% to $3.24 billion, supported by activity in other Cash App segments, including lending and payment services.
Digital-asset infrastructure
Block unveiled updates to its bitcoin ecosystem in April 2026. The ecosystem includes Cash App, Square, the Bitkey hardware wallet and the Proto solution. The new features include automatic bitcoin accumulation, Proof of Reserves and bitcoin payments using near-field communication.
In September 2026, Block also applied to the U.S. Office of the Comptroller of the Currency to establish Builders Bank & Trust, a national trust bank for the custody of bitcoin, stablecoins and other digital assets. The proposed bank does not plan to accept deposits or issue loans and could begin operating only after receiving regulatory approvals.
Source: Incrypted
