Maryland Office of Financial Regulation Joins $80 Million Enforcement Action Against Block, Inc., Cash App for Violating Bank Secrecy Act and Anti-Money Laundering Laws
BALTIMORE, MD (January 28, 2025): The Maryland Department of Labor’s Office of Financial Regulation and 47 other state financial regulatory agencies reached a settlement with 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.
“Mobile payment apps have become an inextricable part of our economy,” says Maryland Secretary of Labor Portia Wu. “The fact that these apps are so popular reflects a growing need for accessible financial services, and also underscores the importance of robust oversight from state financial regulators. It is essential that we prevent bad actors from misusing payment services to commit fraud.”
As part of the multistate settlement, Block agreed to pay an $80 million penalty to the participating states. Maryland will receive approximately $1.6 million.
“Companies that offer money transmission services, like Block and their payment arm CashApp, must follow BSA/AML laws to prevent their platforms from being used for money laundering, fraud, and other criminal activity that harms citizens ,” says Commissioner of Financial Regulation Tony Salazar. “By participating in this multistate settlement, our Office is saying loud and clear that Maryland will not tolerate poor compliance with critical safeguards.”
Under BSA/AML rules, financial institutions 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.
In addition to the monetary penalty, Block agreed to 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.
The Office of Financial Regulation helps safeguard Marylanders' financial interests by enforcing the State’s consumer financial protection laws. The Office supervises state-chartered banks and credit unions and state-licensed money transmitters, lenders, and other financial providers. To learn more about the Office and view past enforcement actions, visit labor.maryland.gov/finance.
The Maryland Department of Labor strives to create an equitable and inclusive Maryland where all residents have the opportunities and resources to attain financial stability, reach their career potential, and contribute to their communities; where businesses have access to capital and the skilled workforce they need to succeed; where workplaces are safe and well-regulated; and where the economy is resilient and growing. For updates and information, follow Labor on LinkedIn, Instagram, Twitter, Facebook, and visit our website.
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