The Digital Payments Company, partly founded by Jack Dorsey, has settled for the financial regulator of the state of New York in the midst of alleged compliance issues with its bank Secrecy Act/Anti -Money Launking (BSA/AML) program.
In a statement, the New York Department of Financial Services (NYDFS) says that Block expires with the way in which the cash app operated, the peer-to-peer money transmissions service of the company that started offering Bitcoin (BTC) transactions in 2018.
Research conducted by the regulator reveal the alleged shortcomings of Block in the due diligence practices of its customer and not implementing checks to prevent money laundering and other illegal activities.
The company would also not be able to treat rapidly backlogs of the transaction alert, largely due to rapid growth between 2019 and 2020.
The supervisor says that the lax treatment of block of risky bitcoin transactions has made anonymous transactions possible to penetrate without the correct control.
Reads the consent of the government agency,
“The AML program that is being carried out by Block, which controls both Fiat and Bitcoin transactions on the Cash app platform, could not sufficiently consider the substantial risks for an entity of its new size and complexity.”
The conditions of the settlement require that Block pays $ 40 million in fines and involves the services of an independent monitor to evaluate compliance with the regulations and remediation efforts.
Says chief inspector of financial services Adrienne A. Harris,
“Compliance functions must keep pace with the growth or expansion of business growth. The rapid growth of the cash app from Block without a robust compliance function has created risk and vulnerabilities that are active in the rules that financial service providers are active in New York.”
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