Las Vegas, NV January 16, 2025
Nevada and
47 state financial regulatory agencies have taken coordinated action against
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.
In the multistate settlement signed
this week, Block agreed to pay an $80 million penalty to the state agencies,
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.
“This was a coordinated effort
between state agencies. MTRA and CSBS assisted the states with acting quickly
to protect consumers,” said Nevada Financial Institutions Division Commissioner
Sandy O’Laughlin.
State regulators in Arkansas,
California, Massachusetts, Florida, Maine, Texas, and Washington State led the
multistate enforcement effort. Block cooperated with the states in the
settlement.
Under BSA/AML rules, financial
services firms 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.
Through a strong, nationwide
regulatory framework, state financial regulators license and serve as the
primary supervisor of money transmitters. States license more than 700 money
transmitters, and 99% of transmission activity through those firms is governed
by the state-developed Money Transmission Modernization Act (MTMA). To protect consumers and
enforce safety and soundness requirements, state regulators regularly
coordinate supervision of multistate firms and, when necessary, initiate
enforcement actions. This coordination – Networked Supervision – supports consistency and
collaboration, while preserving the authority of individual states to take
direct action. Additional information on the state regulatory framework for
money transmission can be found here.
Nevada residents who have questions
about the enforcement action should FIDMaster@fid.state.nv.us or call 702-486-4120. Residents can
also visit NMLS Consumer Access to verify that a company is licensed
to do business in Nevada, and they may also view past enforcement actions.
State financial regulators license
and supervise more than 34,000 nonbank financial services companies through the
Nationwide Multistate Licensing
System, including
mortgage companies, money services businesses, consumer finance providers, and
debt collectors.
About
the Nevada Financial Institutions Division
The mission of the Financial
Institutions Division, an agency of the Department of Business and Industry, is
to maintain a financial institutions system for the citizens of Nevada that is
safe and sound, protects consumers and defends the overall public interest, and
promotes economic development through the efficient, effective, and equitable
licensing, examination and supervision of depository, fiduciary, and
non-depository financial institutions.
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