Block Inc. has agreed to pay $ 40 million to resolve the accusations of the New York Financial Services Department that the company did not adequately managed its money laundering safeguards, according to a regulator statement on Thursday.
Block, which operates the cash application for peer transactions and was previously known as Square Inc., is under orders from the New York regulator to fix any deficiency and send an external monitor. The regulator said that the “lax treatment of high -risk bitcoin transactions” in recent years “in recent years allowed effectively anonymous transactions through its system.
“The rapid growth of Block’s cash application in the absence of a solid compliance function created risks and vulnerabilities that violated the rules that financial service companies operate in New York must adhere,” said Nydfs Superintendent, Adreienne Harris, in the statement. “The department is taking decisive measures to ensure responsibility, including the appointment of an independent monitor to supervise corrective measures.”
In a block statement, the company said it did not admit any of the findings in the case of New York, but is “pleased to put this matter behind.”
“After our recent agreement with our other state money transmission regulators, we have now reached an agreement with the final state money transmission regulator, New York Financial Services Department, to resolve an issue mainly related to the previous CASH APP compliance program,” said the company.
The regulator exams covered a period covered by 2021 and 2022 in the company founded by Jack Dorsy, and the resulting consent order observed “serious compliance deficiencies” that had created “a high -risk environment vulnerable to the exploitation of criminal actors.”
Since 2018, Block has celebrated a New York Bitlicense to carry out digital asset operations in the state.
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