Block Pays Rp12.4 Trillion to DOJ: Compliance Penalty Exceeds Quarterly Profit

Block, the payments company owned by Jack Dorsey, has agreed to pay USD764 million (around Rp12.4 trillion) to settle a US Department of Justice (DOJ) investigation into its anti-money laundering (AML) controls. The figure drew market attention because it exceeds the USD566 million in net profit the company booked in the third quarter of 2025, potentially eroding its financial position in the short term.

The tentative agreement was reached in October and disclosed in a filing with the SEC on 3 November. Under the deal, criminal charges over the failure to maintain an effective AML program as required by the Bank Secrecy Act will be deferred for three years. The gross monetary component reached about USD964 million, but fell to USD764 million after credits from earlier regulatory settlements. Block said it had set aside that amount in its financial statements.

The investigation began in 2023 when the DOJ and SEC examined alleged compliance violations at Block following a report by short seller Hindenburg Research. The SEC itself closed its investigation in March without recommending enforcement action. Hindenburg alleged that Cash App inflated its user numbers by counting duplicate and fake accounts, while weak identity verification allowed criminals to use the platform for fraud and money laundering. Block rejected the findings as inaccurate and misleading.

Beyond the DOJ penalty, Block also faces consequences from state regulators. In April 2025, New York financial authorities fined the company USD40 million after finding serious gaps in its compliance systems. The investigation revealed a backlog of suspicious transaction alerts that surged from about 18,000 in 2018 to more than 169,000 in 2020. Regulators also found that one of Block's screening systems did not automatically block bitcoin transfers to wallets linked to terrorism financing until exposure exceeded 10%.

"We reject Hindenburg's findings as inaccurate and misleading," Block said in its SEC filing, while reaffirming its commitment to improving compliance procedures.

On the operational side, Block's performance from bitcoin trading on Cash App declined. Bitcoin ecosystem gross profit plunged 50% to USD52 million in the third quarter from USD104 million a year earlier, while revenue fell 11% to USD1.8 billion. The company attributed the decline mainly to a decision to cut costs on certain bitcoin transactions. However, other business segments kept growing; overall gross profit rose 22% to USD3.24 billion, supported by lending activity and Cash App payments.

For Indonesia, the Block case is an important mirror for digital financial service providers that are increasingly connected to crypto assets. The Financial Services Authority (OJK) and Bank Indonesia have tightened AML supervision and identity verification, especially since the enactment of the Financial Sector Development and Strengthening Law (P2SK). Domestic industry players need to ensure their suspicious transaction detection systems do not build up backlogs and can block illegal fund flows in real-time, so they do not face similar sanctions.

Looking ahead, the main question is whether Block can fix its compliance governance without sacrificing growth in its under-pressure bitcoin business. If not, global regulatory pressure could trigger a wave of similar scrutiny of other payment platforms offering digital asset services.