iStock illustration

The Connecticut Department of Banking and financial regulators in 48 other states have jointly levied an $80 million fine on the peer-to-peer payments company CashApp and its Block Inc. mobile payments service.

State regulators in Arkansas, California, Massachusetts, Florida, Maine, Texas, and Washington led the effort.

The company violated the Bank Secrecy Act and anti-money laundering laws, the department said.

State regulators say Block was not in compliance with certain requirements, creating the potential that its services could be used to support money laundering, terrorism financing or other illegal activities.

Block agreed to pay the assessed penalty to the state agencies, hire an independent consultant to review the comprehensiveness and effectiveness of its BSA/AML program and submit a report to the states within nine months. Block then will have 12 months to correct any problems found by the review.

“This action underscores the importance of state financial regulators in not only protecting consumers but ensuring the integrity of the financial system as a whole. As these types of financial services continue to become more widespread, the Department stands ready to enforce our laws and ensure that terrorists and other bad actors do no gain access to our financial system,” Banking Commissioner Jorge Perez said in a statement.

In recent years, states across the country have given their banking regulators the power to oversee companies like CashApp and Venmo in a coordinated fashion using a common set of rules in a concept called “networked supervision.”