Block, Inc. (NYSE: XYZ), the payments and financial services company led by Jack Dorsey, disclosed in its third-quarter regulatory filings that it reached an agreement in principle with the U.S. Department of Justice in October 2026 to address a long-running inquiry into its anti-money-laundering controls.
Under the proposed deferred prosecution agreement, the DOJ would defer for three years a charge that the company failed to maintain an effective anti-money laundering program in violation of the Bank Secrecy Act.
Full compliance with the eventual agreement’s terms would lead the DOJ to move to dismiss the deferred charge with prejudice.
The expected financial terms call for a gross monetary component of approximately $964 million, reduced to a net payment of about $764 million after credit for prior regulatory resolutions.
Block had accrued the full $764 million as of September 30, 2026.
The resolution remains subject to a final agreement acceptable to all parties and to court approval.
The company stated it cannot assure that final terms will match those described, or that an agreement will be completed at all, and noted that it is reasonably possible the ultimate outcome could result in losses exceeding the amount already reserved.
The inquiry originated after a short-seller report in March 2023. Both the Securities and Exchange Commission (SEC) and the DOJ opened reviews focused on the report’s allegations, the company’s compliance and risk practices, and related disclosures.
In March 2026 the SEC staff informed Block that it had concluded its investigation and did not intend to recommend enforcement action.
The DOJ presented potential resolution terms the same month, leading to the October agreement in principle.
These developments arrived alongside Block’s third-quarter results, released in its shareholder letter.
Total gross profit rose 22 percent year over year to $3.24 billion. Cash App gross profit increased 27 percent to $2.07 billion, while Square gross profit grew 14 percent to $1.16 billion.
Net income attributable to common stockholders was approximately $566 million.
The company raised its full-year 2026 gross-profit outlook to $12.63 billion, representing 22 percent growth, and lifted related profitability guidance.
The bitcoin ecosystem was the clear exception. Gross profit from that segment fell 50 percent year over year to $52 million, from $104 million in the prior-year quarter.
Bitcoin ecosystem revenue was roughly $1.80 billion, down from about $2.02 billion a year earlier.
Block attributed the profit decline primarily to a strategic decision to lower the fees charged on certain bitcoin transactions within Cash App.
The company continues to describe bitcoin and stablecoins as tools supporting Cash App’s broader expansion.
The $764 million accrual exceeds the quarter’s net income and adds to earlier state-level resolutions involving Cash App’s compliance programs.
Block has emphasized ongoing investments in compliance remediation.
With final terms and judicial approval still pending, the proposed deferred prosecution agreement removes some uncertainty around the multi-year probe while leaving residual risk that costs could prove higher than currently reserved.
