ND DFI Joins $80M Cash App Enforcement Action

ND DFI News

Filed January 16th, 2025

Detected March 18th, 2026

Summary

The North Dakota Department of Financial Institutions, along with 48 other state agencies, has joined a multistate settlement with Block Inc. and its Cash App service. Block Inc. will pay an $80 million penalty to resolve violations of Bank Secrecy Act and anti-money laundering laws.

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What changed

The North Dakota Department of Financial Institutions (ND DFI) has joined a coordinated multistate enforcement action against Block Inc. and its Cash App mobile payment service, resulting in an $80 million penalty. The action addresses violations of Bank Secrecy Act (BSA) and anti-money laundering (AML) laws, which regulators found created potential for illicit use of the service. Block Inc. is required to hire an independent consultant to review its BSA/AML program and submit a report within nine months, followed by a 12-month period to correct any identified deficiencies.

Regulated entities, particularly those in the financial services sector, should note the significant penalty and the emphasis on robust BSA/AML compliance, including customer due diligence and suspicious activity reporting. While this specific action targets Block Inc., it underscores the ongoing scrutiny of digital payment services and the potential for substantial penalties for non-compliance. Companies should review their existing BSA/AML programs to ensure they meet regulatory expectations and are prepared for potential future enforcement actions or audits.

What to do next

Review BSA/AML program for compliance with customer due diligence and suspicious activity reporting requirements.
Assess potential exposure to similar enforcement actions based on the nature of services offered.
Ensure robust controls are in place to prevent illicit use of financial services.

Penalties

$80 million penalty

Source document (simplified)

ND Department of Financial Institutions Joins $80 Million Enforcement Action Against Block Inc. Cash App for BSA/AML Violations

Thursday, January 16, 2025

Categories: Order BISMARCK, N.D. – The North Dakota Department of Financial Institutions and 48 state financial regulatory agencies have taken coordinated action against Block Inc. for violations of Bank Secrecy Act (BSA) and anti-money laundering (AML) laws that safeguard the financial system from illicit use.

More than 50 million consumers in the United States use Cash App, Block’s mobile payment service, to spend, send, store and invest money.

In the multistate settlement signed this week, Block agreed to pay an $80 million penalty to the state agencies, hire an independent consultant to review the comprehensiveness and effectiveness of its BSA/AML program, and submit a report to the states within nine months. Block then will have 12 months to correct any deficiencies found in the review after the report is filed.

“It is important for citizens to be able to have confidence in the financial services industry,” Department of Financial Institutions Commissioner Lise Kruse said. “Financial services companies must abide by North Dakota law, and I appreciate the work of my colleagues, the state regulators in Arkansas, California, Massachusetts, Florida, Maine, Texas and Washington state, who led this multistate enforcement effort.”

Under BSA/AML rules, financial services firms are required to perform due diligence on customers, including verifying customer identities, reporting suspicious activity and applying appropriate controls for high-risk accounts. State regulators found Block was not in compliance with certain requirements, creating the potential that its services could be used to support money laundering, terrorism financing or other illegal activities.

The Department of Financial Institutions licenses and supervises nearly 1,700 nonbank financial services companies, 183 of those being money transmitters.

North Dakota residents who have questions about the enforcement action should contact the Department of Financial Institutions at dfi@nd.gov **** or (701) 328-9933. Residents can also visit NMLS Consumer Access to verify that a company is licensed to do business in North Dakota.