TLDRBlock reached a $45 million agreement with 46 state regulators to resolve allegations of inadequate fraud protectionState authorities claim Cash App deceived consumers by advertising bank-level security features it didn’t provideInvestigators found Block prioritized marketing expansion over security improvements as fraud incidents increasedThe settlement requires Block to implement round-the-clock customer service with live representatives accessible for a minimum of 13.5 hours each dayBlock’s stock price dropped approximately 1.5% following the announcement; the company maintains its innocenceBlock Inc. has reached a $45 million agreement with 46 state regulators to resolve accusations that its Cash App platform failed to adequately safeguard customers from fraudulent activity. Shares of Block (XYZ) declined approximately 1.5% following the announcement.Block, Inc., XYZThe resolution stems from a multi-state probe conducted by attorneys general who determined that Cash App promoted itself as providing security comparable to established banking institutions, despite lacking those actual safeguards.New York’s Attorney General Letitia James stated clearly: “For years, Cash App users lost money to costly scams because Block cared more about profits than protecting its users.”State investigators discovered that Cash App operated without a reliable fraud monitoring system and failed to maintain a functional customer support line for reporting fraudulent transactions. When customers found themselves locked out of accounts, many fell victim to fraudulent support numbers operated by scammers.NEWS: We’ve secured a $45 million settlement with Block, the company behind CashApp, for misleading consumers about the safety of its app and leaving them vulnerable to fraud.Block told Cash App consumers their money was just as safe and secure as in a bank — which was not true…— Rob Bonta (@AGRobBonta) July 8, 2026Regulators also noted that Cash App permitted account creation without requiring a Social Security number or birth date verification, while allowing unlimited account creation per individual — circumstances that investigators say facilitated fraudulent activity.State attorneys general determined Block recognized the escalating fraud problem but chose to amplify marketing efforts instead of strengthening security measures. The investigation revealed Block specifically targeted individuals without traditional banking access, for whom Cash App frequently served as their principal financial platform.A particular promotional campaign labeled “Cash App Friday” drew regulatory scrutiny. Participants were prompted to share their unique app handles on social platforms for prize opportunities. Scammers exploited this by contacting participants, falsely claiming they’d won prizes, and manipulating them into surrendering account credentials.Authorities allege Block understood these scams were occurring but continued the promotional campaign and prepared customer service teams to handle calls from victimized users.What Block Must Now DoThe settlement terms mandate that Block must completely restructure its customer assistance and security protocols. This includes establishing 24-hour customer support infrastructure with live representatives available for no less than 13.5 hours daily.Block is also prohibited from making unsubstantiated assertions about Cash App’s security features.Washington State Adds Another HitIn a separate action, Washington State’s Attorney General Nick Brown revealed a $20 million agreement with Block concerning fraudulent unemployment benefit transactions processed during the COVID-19 crisis.Brown’s office reported that throughout a five-month window in 2020, Cash App facilitated at least $22 million in unemployment payments illegally obtained through stolen personal data belonging to Washington residents. Block disputed liability in this matter as well.This represents a recurring pattern for Block. In the previous year, the company committed to paying as much as $120 million — including $40 million specifically to New York — to settle distinct state allegations that Cash App inadequately prevented money laundering activities.In an official response, Block characterized the multi-state agreement as “a previously disclosed legacy matter that primarily relates to historical aspects of our business” and emphasized that Cash App has invested significantly in consumer safeguards and regulatory compliance.Every U.S. state participates in the current agreement with the exception of Hawaii, Missouri, South Carolina, and Wyoming.The post Block (XYZ) Shares Dip Following $45M Cash App Fraud Settlement with States appeared first on Blockonomi.