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Block agrees in principle to $764m DOJ settlement over AML controls
The payments company disclosed a deferred prosecution deal alongside quarterly results in which bitcoin gross profit fell by half.
Key takeaways
- Deferred prosecution. The deal would defer a Bank Secrecy Act charge for three years and requires final approval; full compliance would lead prosecutors to seek dismissal.
- Accrued in full. Block booked the entire $764 million as of September 30 and said losses above that figure are reasonably possible.
- Bitcoin profit halves. Bitcoin gross profit fell to $52 million from $104 million a year earlier, a decline Block links to lower fees rather than weaker demand alone.
What happened
Block, the payments company led by Jack Dorsey, has agreed in principle to pay $764 million to settle a U.S. Department of Justice investigation into its anti-money-laundering controls, according to a quarterly filing disclosed on November 3 and reported by Bitcoin Magazine and Cryptonews.com.
The agreement, reached in October, would defer for three years a criminal charge that Block failed to maintain an effective anti-money-laundering program under the Bank Secrecy Act. The gross figure is about $964 million, reduced to $764 million after credits for earlier regulatory settlements. Block has accrued the full amount and said additional losses beyond it are reasonably possible. The company disputes the government's basis and methodology, and the deal still requires final approval.
Net income was about $566 million, less than the proposed settlement figure. Bitcoin was the weak spot: gross profit from the bitcoin business fell 50% to $52 million from $104 million a year earlier, while bitcoin revenue dropped 11% to $1.8 billion.
Block attributed the bitcoin decline to its own decision to cut fees on certain Cash App bitcoin transactions, part of an effort to position bitcoin as a payment rail rather than a trading product. The company also raised its full-year 2026 gross profit forecast to $12.63 billion, according to Cryptonews.com.
First $85.8KLatest $80.6K-6.1% over the period
Points are daily observations, not closing prices.
Why it matters
The settlement is larger than the profit Block reported for the quarter, making it a material item for a company that is simultaneously seeking an industrial bank charter for a unit it calls Builders Bank, which would offer custody and fiduciary services for bitcoin. Bank regulators weigh compliance history in charter decisions, so the unresolved case and its terms could factor into that process.
The deferred prosecution structure lets Block avoid a conviction if it meets the agreement's conditions over three years, a path Binance took in 2023 at a cost of $4.3 billion. For investors, the quarter presents a split picture: strong growth in Cash App and Square alongside a legal charge that remains subject to final terms and court approval.
What the data shows
Block reported total gross profit of $3.24 billion, up 22%, with Cash App at $2.07 billion and Square at $1.16 billion. Bitcoin gross profit was $52 million, down from $104 million, and bitcoin revenue was $1.8 billion, down 11%.
Revenue from bitcoin sales to customers, which Block books at gross, fell as the price dropped from about $114,000 to $70,000 over the year.
Background
Block called the report inaccurate and misleading. The Justice Department and SEC opened inquiries into compliance practices and related disclosures; the SEC closed its side in March without recommending enforcement.
State regulators acted first. A multistate settlement in January 2025 added $80 million. Those payments account for part of the $200 million credit against the DOJ figure.
What to watch
Several elements remain open: final agreement terms and court approval of the deferred prosecution deal, the possibility that costs exceed the accrued amount, and how the compliance record is weighed in the Builders Bank charter application. The trajectory of bitcoin gross profit will also be watched, given that the decline reflects deliberate fee cuts rather than only market conditions.
Questions readers ask
What does a deferred prosecution agreement mean for Block?
Under the proposed structure, the criminal charge is deferred for three years. If Block meets the agreement's terms, prosecutors would move to dismiss the deferred charge, so the company would avoid a conviction.
Why did Block's bitcoin profit fall 50%?
Block said the decline came from its decision to cut fees on certain Cash App bitcoin transactions as part of a push to make bitcoin a payment rail rather than a trading product. Bitcoin revenue also fell as the price dropped over the year.
Has the settlement been finalized?
No. The agreement is in principle and remains subject to final terms and court approval. Block has accrued the full $764 million and said losses above that amount are reasonably possible.
