Block has set aside $764 million for a proposed resolution of a U.S. Justice Department investigation into its anti-money-laundering controls, according to its third-quarter filing with the Securities and Exchange Commission. The payments company said it reached an agreement in principle with the DOJ in October, but the arrangement is not final and still requires a definitive agreement and court approval.

A proposed agreement, not a completed settlement

The contemplated deferred prosecution agreement would postpone for three years a charge alleging that Block failed to maintain an effective anti-money-laundering program under the Bank Secrecy Act. Block said the Justice Department would seek dismissal with prejudice if the company fully satisfies the obligations in the final agreement during that period. The filing does not identify those operating or compliance requirements.

Related reporting: Robinhood Crypto Revenue Falls 55% as Event Contracts Surge

Block expects the arrangement to carry an approximately $964 million gross monetary component and a net payment of about $764 million after credits for earlier regulatory resolutions. It accrued the net amount as of September 30. An accrual records an estimated obligation in the accounts; it does not mean the money has already been paid or that final terms cannot change. Block warned that a completed resolution could cost more than the amount reserved, and that the DOJ could pursue the matter if no final agreement is reached.

Bitcoin revenue remains much larger than Bitcoin profit

The legal disclosure arrived with results showing a widening gap between the size and profitability of Block's Bitcoin activity. Bitcoin ecosystem revenue fell 11% from a year earlier to about $1.80 billion in the third quarter, while related gross profit dropped 50% to $52 million. Block attributed the profit decline mainly to its decision to reduce fees on certain Cash App Bitcoin transactions.

Bitcoin still represented 27% of Block's total quarterly revenue but only 2% of total gross profit. Within Cash App, it produced 43% of segment revenue and 3% of segment gross profit. Those ratios reflect accounting that records the full sale value of Bitcoin as revenue and the cost of acquiring the asset as cost of revenue, so headline sales are not comparable with fee or lending revenue on a dollar-for-dollar basis.

Stronger company results do not remove the legal uncertainty

Block's overall gross profit increased 22% to $3.24 billion, Cash App gross profit rose 27% to $2.07 billion and operating income grew 5% to $428 million. Net income attributable to common shareholders was $566 million. The company also raised its full-year guidance, showing that the proposed DOJ payment sits alongside growth in its broader payments, commerce and lending operations rather than a company-wide contraction.

The SEC's staff separately closed its inquiry in March without recommending enforcement action, according to Block, but that outcome does not resolve the DOJ process. Investors, Cash App customers and compliance partners still need the final agreement, court approval and details of any monitoring or remediation duties before the legal and operational consequences can be assessed. The filing also leaves open whether the ultimate terms will affect product access, onboarding checks or transaction reviews for Cash App users. The next milestones are a signed deferred prosecution agreement, the court's decision and subsequent evidence that Block is meeting the promised controls throughout the three-year term.

Sources

AI-generated editorial image; not a photograph of the reported event. Prepared with AI assistance and source verification.