Block Proposes $764 Million DOJ Deal Over Alleged AML Violations

By Nathan Brooks

Block disclosed a proposed $764 million net payment to the U.S. Department of Justice in a three-year deferred prosecution agreement, according to the company’s filing. The proposal would resolve, subject to court approval, an alleged Bank Secrecy Act violation tied to anti-money laundering compliance.

Block put the agreement’s gross monetary component at about $964 million. Credits for earlier regulatory resolutions reduce that figure by roughly $200 million, producing an expected net payment of about $764 million. As of Sept. 30, 2026, Block had accrued the $764 million net amount.

The agreement in principle was reached in October. The three-year term would defer a charge rather than end the matter at signing. If Block meets its obligations, the Justice Department would move to dismiss the charge with prejudice. Court approval remains required before the proposed terms become final.

Proposed terms and approval

Compliance with the agreement’s obligations during the three-year deferral period determines whether the Justice Department would move to dismiss the charge with prejudice. That disposition would bar refiling of the same charge. The three-year period is the central enforcement window for Block under the proposed terms.

Block said in its filing that it “cannot guarantee the agreement will be finalized on those terms, or at all,” and that potential losses could exceed the amount it has accrued. The accrued balance therefore does not cap the company’s disclosed exposure.

The warning leaves two contingencies: a court could reject or change the proposal, and Block could incur losses above the recorded $764 million if the matter does not resolve on the disclosed terms. The agreement in principle marks a proposed procedural resolution, not a final outcome.

How the inquiry began

The Justice Department and Securities and Exchange Commission opened inquiries shortly after a short-seller report in March 2023, Block said. The inquiries focused on allegations concerning the company’s compliance, risk practices and related disclosures. Block describes the deferred charge as an alleged failure to maintain an effective anti-money laundering program under the Bank Secrecy Act.

The March 2023 report preceded both agency inquiries, while the October agreement in principle addresses the Justice Department’s deferred charge. The filing separately identifies the SEC inquiry.

How the payment was calculated

The $764 million expected net payment differs from the agreement’s gross monetary component. Block puts that gross amount at about $964 million. Credits for earlier regulatory resolutions account for the roughly $200 million difference. The credits reduce the payment due; they do not remove the proposed deferral or court-approval condition.

Block had accrued the full expected net amount as of Sept. 30, 2026. That entry reflects the proposed obligation at the disclosed net figure, but the filing says losses could exceed the accrued amount. The accrual therefore establishes a recorded cost, not a guaranteed ceiling.

What does the proposed deal change for Block?

Block gains a defined route away from the deferred charge, but it has not secured that outcome. The route requires court approval and fulfillment of the agreement’s obligations over three years. If those conditions hold, prosecutors would move to dismiss the charge with prejudice. Until then, the payment remains proposed and the legal matter remains pending.

The practical change is a defined enforcement window rather than immediate closure. After approval, Block must operate under the agreement’s terms for three years and remain exposed to the possibility of costs above its accrual. The next milestones are a court ruling on the deferred prosecution agreement and, if approved, compliance through the three-year enforcement window.