Block's bitcoin gross profit halves to $52 million as it agrees in principle to a $764 million DOJ anti-money-laundering settlement

Summary

Jack Dorsey's Block reported third-quarter net income of $566 million, up from $462 million a year earlier, and raised its full-year gross profit forecast to $12.63 billion, The Block reported; CoinDesk also reported the $566 million profit.

Gross profit from Block's bitcoin business fell 50% year over year to $52 million, which the company attributed to its decision to cut fees on certain bitcoin transactions in Cash App, both outlets reported.

Separately, Block has agreed in principle to pay $764 million to resolve a Justice Department investigation into its anti-money-laundering controls, CoinDesk reported, citing a Nov. 3 SEC filing.

The proposed deal would defer for three years a criminal charge alleging Block failed to keep an effective anti-money-laundering program under the Bank Secrecy Act, according to CoinDesk.

Block shares rose 6.2% in after-hours trading on Tuesday after the earnings release, The Block reported.

Key facts

• The proposed DOJ resolution has a gross monetary component of about $964 million, reduced to $764 million after credits for earlier regulatory settlements, and Block has already set aside that amount, CoinDesk reported from the filing. (CoinDesk)
• The investigation dates to 2023 and followed a Hindenburg Research short-seller report; the SEC closed its separate probe in March without recommending enforcement action, CoinDesk said. (CoinDesk)
• Block's overall gross profit rose 22% to $3.24 billion, and Cash App's gross profit rose 27% to $2.07 billion. (The Block)
• Cash App generated $1.77 billion in revenue from its bitcoin ecosystem in Q3; CoinDesk described bitcoin revenue as down 11% to $1.8 billion. (The Block)
• Block said it expects gross profit to grow at least 15% in 2027. (The Block)

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