WirepolicyDextape brief
Jack Dorsey’s Block (XYZ) Sets Aside $764 Million for DOJ Settlement as Bitcoin Profit Halves
Block agreed in principle to a $764 million deferred-prosecution deal over anti-money-laundering failures at Cash App, a sum that exceeds its $566 million Q3 profit, while bitcoin gross profit fell 50% after the company cut trading fees.
Dextape brief
Block, the payments firm led by Jack Dorsey, has set aside $764 million to settle a federal anti-money-laundering probe, a figure that exceeds the $566 million in profit it posted for the third quarter. The deal, struck in October and revealed in a quarterly report filed November 3, would hold off for three years a criminal count accusing the firm of lacking working safeguards against money laundering under the Bank Secrecy Act. Block disputes how the government reached its assessment, and final approval is still required. Bitcoin was the weak spot, as gross profit from that business fell by half to $52 million, which the company linked to lower fees on some Cash App bitcoin transactions.
Why it matters: The case shows how a compliance probe and a deferred prosecution can affect a crypto-linked payments company's results while it pursues a bank charter.
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Dextape context
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Terms in this story
- Block
- A batch of transactions added to a blockchain together.
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