Block (XYZ) Will Pay $764 Million to Resolve DOJ Case as Bitcoin Profit Is Cut in Half

In principle, Block has agreed to a $764 million payment to close a Justice Department investigation of its anti-money-laundering controls. That sum is greater than the $566 million in profit the company posted for the third quarter.

The pact was struck in October and surfaced in a 10-Q submitted Nov. 3. It would hold off for three years a criminal charge that Block failed to maintain an effective anti-money-laundering program under the Bank Secrecy Act.

Credits from prior regulatory settlements bring the roughly $964 million gross figure down to $764 million. Block has booked the full amount and says losses above that are “reasonably possible.”

Block challenges both the basis and the methodology behind the government’s assessment, and the agreement still needs final approval.

The settlement cast a shadow over the quarter, in which gross profit advanced 22%, reaching $3.24 billion; Cash App was up 27% at $2.07 billion; Square added 14%, bringing in $1.16 billion, according to the company release.

Bitcoin did not follow that trend. The bitcoin unit’s gross profit fell 50% from $104 million a year earlier to $52 million, and revenue from bitcoin dropped 11% to $1.8 billion.

A Block case that began with a short seller

The investigation goes back to March 2023, when Hindenburg Research asserted that Cash App padded its user numbers with duplicate and fraudulent accounts and that weak identity verification let criminals use the platform for scams and money laundering. Block responded that the report was inaccurate and misleading.

The Justice Department and the SEC both opened inquiries into Block’s compliance procedures and associated disclosures. The SEC wrapped up its portion in March with no recommendation to enforce.

State regulators were quicker to act. The New York Department of Financial Services fined Block $40 million in April 2025, saying it found a pileup of suspicious-activity alerts that grew from roughly 18,000 in 2018 to more than 169,000 by 2020, as well as a screening system that did not stop bitcoin transfers to wallets tied to terrorism financing until exposure exceeded 10%.

A multistate settlement in January 2025 contributed another $80 million. Those payments make up part of the $200 million credit subtracted from the DOJ amount.

The deferred-prosecution format lets Block avoid a conviction if it satisfies the agreement over three years, the same route Binance took in 2023 when it paid $4.3 billion.

The charge comes as Block pursues an industrial bank charter for Builders Bank, a unit that would handle bitcoin custody and fiduciary services. Regulators factor compliance history into charter decisions.

The bitcoin profit drop was deliberate. Block tied the decrease to its choice to lower fees on certain Cash App bitcoin transactions, part of an effort to turn the asset into a payment rail rather than a product for trading.

In May the company auto-enabled Lightning payments for around 1 million Square merchants, waived fees on bitcoin processing through 2026, and in October launched a national ad campaign focused on spending bitcoin instead of holding it.

Block records revenue from customer bitcoin sales on a gross basis, and that revenue fell as bitcoin’s price declined from roughly $114,000 to $70,000 over the year.

As of the first quarter, Block held 28,355 BTC across its treasury and customer balances, with about 9,000 BTC in its corporate treasury, and it continues to devote 10% of bitcoin gross profit to purchases.