Block's $764 Million DOJ Agreement Carries a Three-Year Clock

By Elena Vasquez

Jack Dorsey's Block Inc. (XYZ) agreed in principle to pay $764 million to resolve a U.S. Department of Justice investigation into its anti-money-laundering controls, according to a Form 10-Q filed with the SEC on Nov. 3, 2026. The proposed payment is larger than Block's $566 million profit for the third quarter.

The agreement, reached in October 2026, would defer for three years a criminal charge alleging that Block failed to maintain an effective anti-money-laundering program under the Bank Secrecy Act. Block disputes the government's assessment and methodology, and the proposal still requires final approval.

What does the agreement change?

DOJ structured the proposal as a deferred prosecution agreement. Before credits for earlier regulatory settlements, the gross figure was about $964 million; $200 million in credits reduced the stated payment to $764 million. In its filing, Block said it had accrued the full amount and disclosed that additional losses above the accrued amount were “reasonably possible.”

A deferred prosecution agreement allows a company to avoid conviction if it satisfies the agreement's terms for three years. Binance took that route in 2023 at a cost of $4.3 billion, although the comparison shows regulatory scale rather than equivalence between the cases. For now, the criminal case remains unresolved pending final approval and three years of compliance.

What did regulators find?

Hindenburg Research began the public case in March 2023, alleging that Cash App inflated user counts with duplicate and fraudulent accounts. It also alleged weak identity checks enabled scams and money laundering; Block called the report “inaccurate and misleading.” Those were allegations, not a DOJ finding, although they framed the compliance issues later examined by regulators.

The Justice Department and Securities and Exchange Commission opened inquiries into compliance practices and related disclosures. The SEC closed its side in March without recommending enforcement, leaving the DOJ's criminal resolution as the remaining federal action.

State regulators acted first. A multistate settlement in January 2025 added $80 million, while the New York Department of Financial Services fined Block $40 million in April 2025. Those payments account for part of the $200 million credit against the DOJ figure.

NYDFS found that Cash App's backlog of suspicious-activity alerts grew from about 18,000 in 2018 to more than 169,000 by 2020. It also found that a screening system did not block bitcoin transfers to wallets linked to terrorism financing until exposure passed 10%. The regulatory concern reaches transaction controls, not just disclosure wording.

What happened to Block's businesses?

Block's gross profit rose 22% to $3.24 billion in the third quarter. Cash App gross profit increased 27% to $2.07 billion, while Square rose 14% to $1.16 billion, according to the company release.

Bitcoin moved in the opposite direction. Gross profit from the bitcoin business fell 50% to $52 million from $104 million a year earlier, and bitcoin revenue dropped 11% to $1.8 billion.

Revenue from bitcoin sales to customers, which Block records on a gross basis, also fell as bitcoin moved from about $114,000 to $70,000 over the year. The segment remains profitable, but its earnings contribution is shrinking as Block trades some transaction revenue for lower fees. The broader businesses still grew, but bitcoin is becoming a smaller profit engine.

Why is Block expanding bitcoin payments?

Block attributed the profit decline to a deliberate decision to reduce fees on certain Cash App bitcoin transactions. The company framed the strategy as making bitcoin a payment rail rather than a trading product, a choice that lowers near-term margin in exchange for greater usage. That is a margin-for-volume trade, not proof of a larger earnings contribution.

In May, Block automatically enabled Bitcoin Lightning payments for about 1 million Square merchants. It waived bitcoin processing fees through 2026 and launched a national advertising campaign in October centered on spending bitcoin rather than holding it.

Block held 28,355 BTC across treasury and customer balances as of the first quarter, including about 9,000 BTC in corporate treasury. That total includes customer coins, while Block continues to direct 10% of bitcoin gross profit toward bitcoin purchases. The strategy prioritizes payment volume over reported bitcoin profit.

What does the DOJ agreement mean for the bank charter?

Block is pursuing an industrial bank charter for a unit it calls Builders Bank. The proposed unit would provide custody and fiduciary services for bitcoin, and bank regulators weigh compliance history in charter decisions.

Block's ability to meet the deferred prosecution agreement's three-year terms will therefore accompany the charter application. No decision timetable was provided for either the DOJ agreement or the charter review. The next concrete tests are final approval of the deferred prosecution agreement, three years of compliance monitoring and the Builders Bank charter review.