Block Reaches Preliminary Settlement With DoJ Over Money Laundering

Block Inc., the parent of Cash App and Square, has reached an agreement in principle with the US Department of Justice to resolve its anti-money laundering investigation for about $764 million net, the company disclosed in its quarterly filing.

The deal is not final. The Block DOJ money laundering settlement still needs a definitive agreement acceptable to all parties and court approval, and Block has told investors it cannot assure that a final agreement will be reached on these terms or at all.

Block DOJ money laundering settlement: the terms

Block said it reached the agreement in principle with the DoJ in October 2026. The proposed resolution takes the form of a deferred prosecution agreement, under which prosecutors file a charge but hold it in abeyance while the company meets set conditions.

The charge is failure to maintain an effective anti-money laundering program under the Bank Secrecy Act. Block said the DoJ would hold the charge in abeyance for three years. If Block complies with the agreement during that period, the DoJ would seek dismissal of the charge.

The gross monetary component is about $964 million. It falls to roughly $764 million after credit for earlier regulatory resolutions, which Block said it would receive against the DoJ amount.

Block had accrued the full $764 million as of September 30, 2026. It has also told investors that the final terms could differ from those described and that a loss above the accrual is reasonably possible.

How the DoJ money laundering reserve grew

The size of Block’s reserve tracked the talks. In its quarterly report for the period ended September 30, Block set out the path from the first quarter.

In March 2026, the DoJ presented Block with potential terms for resolving the matter. Block accrued an estimated loss of $240 million as of the end of the first quarter. The figure rose to $526 million at the end of the second quarter and to $764 million at the end of the third.

Block disputed the DoJ’s basis and methodology in the earlier filings and made a counterproposal in April. The October agreement in principle ended that round of talks.

The inquiry began shortly after a short seller published a report on Block in March 2023. Block said it received inquiries from the Securities and Exchange Commission and the DoJ after the report appeared. The SEC told Block in March 2026 that it had ended its investigation and did not intend to recommend an enforcement action.

Earlier penalties set the credit for Block

The $200 million gap between the gross and net figures reflects Block’s earlier settlements with regulators over the same compliance program. Two matters stand out.

In January 2025, Block agreed to pay $80 million to 48 state financial regulators over failures to meet Bank Secrecy Act and anti-money laundering requirements, and to take corrective action. The state regulators were coordinating through the Conference of State Bank Supervisors.

On April 10, 2025, the New York State Department of Financial Services announced a $40 million penalty against Block over deficiencies in the Cash App compliance program. The order found gaps in customer due diligence and risk-based controls, and it required Block to retain an independent monitor selected by the regulator. Block did not admit the findings.

The Consumer Financial Protection Bureau acted separately. On January 16, 2025, it ordered Block to pay a $55 million civil penalty and to provide up to $120 million in redress to consumers, a total of $175 million. That order addressed fraud management and consumer protection law, not the Bank Secrecy Act.

What the Block DOJ money laundering settlement means for compliance teams

For compliance teams at banks and payments firms, the proposed resolution is another sign that federal prosecutors will charge program failures under the Bank Secrecy Act, even where the company is a money transmitter rather than a bank. The core allegation is that the AML program as a whole was not effective, not that a single transaction slipped through.

The structure also matters. A deferred prosecution agreement keeps the company operating but places it under a multi-year regime of conditions, and any breach can lead to the charge being pursued. Prosecutors have used other agreement types where cases are narrower, as in the Extreme Networks non-prosecution agreement in an OFAC sanctions case.

Block’s disclosures do not describe the specific conduct period or any compliance undertakings in the final deal, such as a DoJ-appointed monitor. Those terms would appear in the definitive agreement if it is reached and filed with a court.

The deal lands as DoJ officials press executives on program resources. A senior DoJ official told a third-party risk summit that C-suites should fully fund compliance, a message that sits alongside prosecutions built on ineffective programs.

What comes next for the Block settlement

Block must now negotiate the final money laundering settlement with the DoJ and obtain court approval. The terms, including the length of any monitoring and the exact credits, will be fixed only at that stage.

Block’s next periodic filing will show whether the $764 million accrual holds or is adjusted. The company’s annual report for 2026 is the next scheduled disclosure after that, and any definitive agreement would be disclosed when signed.