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The Pennsylvania Department of Banking and Securities (DoBS) and regulatory agencies from 47 other states are accusing Block, Inc., the company behind Cash App, of violating banking rules. The allegations focus on Block's compliance with the Bank Secrecy Act (BSA) and anti-money laundering (AML) laws, which aim to protect the financial system from illegal activities.
Block has agreed to pay an $80 million penalty as part of a multi-state settlement, with approximately $1.6 million allocated to each of the 48 participating state regulators. In addition, Block will hire an independent consultant to evaluate its BSA/AML program and submit a report within nine months. The company will have 12 months to address any deficiencies identified in the review.
Cash App, a mobile payment service used by over 50 million consumers in the United States, is at the center of these allegations. State regulators found that Block failed to meet certain requirements, potentially allowing its services to be used for money laundering, terrorism financing, and other illegal activities. The enforcement effort was led by state regulators in Arkansas, California, Massachusetts, Florida, Maine, Texas, and Washington, with Block cooperating throughout the process.
The BSA/AML rules require financial services firms to conduct due diligence on customers, including verifying their identities and reporting suspicious activities. Pennsylvania residents with questions about the enforcement action can contact the DoBS Consumer Services Office or visit their website.