Block Inc.: when the lack of KYB costs an American giant millions

Why know the identity of your customers Is no longer enough.

In 2024, The New York Department of Financial Services (NYDFS) imposed a fine of $50 million unto Block Inc., the parent company of the application Cash App, for serious breaches of the process Know Your Business (KYB).

But who is Block Inc., and how did we get there?

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📌 Who is Block Inc.?

Founded by Jack Dorsey, ex-CEO of Twitter, Block Inc. (formerly Square) is an American tech company that has become a pillar of dematerialized payments And of the digital finance.

Under its umbrella, we find:

• Square : the historical payment terminal solution for merchants.
• Cash App : P2P payment and crypto trading application that is very popular in the US.
• TIDAL : music streaming platform acquired in 2021.
• Spiral : an open source initiative around Bitcoin.
• A generative AI division in full development.

A modern, fast, global ecosystem... but one that has forgotten one fundamental detail: auditing client businesses.

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💥 The mistake that started it all

Cash App allowed businesses to create pro accounts in a few clicks.
But the process KYB (Know Your Business) was almost non-existent. Result:

• Thousands of Fake accounts professionals were created.
• Illegitimate entities have laundered money, took advantage of the system, and circumvented regulation.
• The traceability of beneficial owners was unclear, if not non-existent.

When the NYDFS investigated, the findings were indisputable: serious and repeated breaches compliance obligations.

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🧨 The bill is hefty: $50 million

Block Inc. had to:

• Pay $50 million fine.
• Drastically strengthen its verification processes.
• Review its internal governance related to compliance.

Beyond the fine, it is above all a blow for the reputation of a listed company, supposed to set an example.

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🎯 What decision makers need to remember

Not knowing your customers is risky. But not knowing your business customers can ruin you.

KYB compliance is not a check box. It is a insurance against fraud, fines, and bad buzz.

Today, solutions like Dataleon allow businesses to:

• Verify instantly corporate identity (KYB).
• Automate the verification of legal documents, statutes, beneficial owners.
• Ensure their compliance as soon as a B2B customer is onboarded.
• Avoid mistakes that cost the biggest tens of millions.
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📣 Conclusion

Si Block, with its billions, its tech teams and its pioneer image, can fall into the trap of a neglected KYB...
So any business can be exposed.

🔐 The best time to strengthen your KYB compliance was yesterday.
The second best moment is today.

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