Block (formerly Square), the payments company founded by Jack Dorsey, has agreed in principle to pay $764 million to resolve a U.S. Department of Justice (DOJ) investigation into its anti-money-laundering (AML) controls. The disclosure comes as the firm's Bitcoin business reported a sharp decline in quarterly profit.

Deferred Criminal Charge Under the Bank Secrecy Act

The proposed settlement was disclosed in a securities filing dated November 3, 2026. Under its terms, a criminal charge alleging that Block failed to maintain an effective anti-money-laundering programme in violation of the Bank Secrecy Act — the primary U.S. anti-money-laundering law — would be deferred for three years. The statute requires financial institutions to maintain effective AML programmes, monitor transactions, and report suspicious activity to U.S. authorities. Deferred resolutions of this kind hold a charge in abeyance while a company satisfies the terms of the arrangement, and the charge can proceed if those terms are not met.

The agreement carries a gross monetary component of approximately $964 million, reduced to $764 million after credits for previous regulatory settlements. Block has already set aside the full amount, although the final agreement remains subject to court approval.

Probe Rooted in Hindenburg Research Allegations

The DOJ investigation began in 2023 following allegations by short seller Hindenburg Research that Cash App, Block's mobile payments platform, had weak compliance controls that allowed fraudulent accounts and illicit transactions to go undetected. Block rejected the allegations at the time as inaccurate and misleading. Hindenburg Research, which published critical reports on companies its researchers bet against, announced in January 2025 that it was disbanding.

Prior New York Enforcement Action

The federal case is not Block's first regulatory setback over compliance. In April 2025, the New York State Department of Financial Services, New York's financial regulator, fined the company $40 million over compliance failures, including a backlog of suspicious transaction alerts that had grown to more than 169,000 by 2020.

Bitcoin Profits Halve as Broader Business Grows

The settlement disclosure came alongside quarterly results that showed pressure on Block's Bitcoin operations. In the third quarter of 2026, gross profit from the company's Bitcoin ecosystem fell 50% to $52 million, from $104 million a year earlier, as the company reduced fees on certain Bitcoin transactions. Bitcoin revenue declined 11% to $1.8 billion.

The Bitcoin decline came despite stronger performance across the broader business. Block's overall gross profit rose 22% to $3.24 billion, supported by growth in Cash App's lending and payments operations, which helped offset the weakness in the Bitcoin segment.

Settlement Exceeds Quarterly Net Profit

The proposed settlement exceeds Block's reported net profit of $566 million for the third quarter of 2026, adding to scrutiny of the company's compliance costs as it expands beyond Bitcoin trading. The agreement's next milestone is court approval; once in force, the arrangement would keep the criminal charge deferred for the three-year term.

This article was first published by BitcoinKE.