Cash App to Discontinue Bitcoin Transfers by User Tags Amid Regulatory Concerns

Cash App, a popular mobile app for peer-to-peer payments, investing, and cryptocurrency transactions, has announced that it will end its Bitcoin transfer feature by user tags, also known as $cashtags, by late December 2024.

Background on the Decision

The decision comes months after federal authorities raised concerns over the platform’s ability to prevent money laundering. According to a notice on Cash App’s help page, users will no longer be able to send and receive Bitcoin between $cashtags as of December 20th, 2024. However, they can still use the Lightning Network or the Bitcoin blockchain to transfer Bitcoin.

Cash App’s Explanation

A spokesperson for Cash App stated that the company made this decision to “focus our internal resources on the products and services that Bitcoin holders on Cash App use and value most.” The spokesperson emphasized that the decision is not connected to the ongoing federal investigation into Block’s compliance practices.

“$cashtag transactions using U.S. dollars and all other bitcoin features, including the ability to send and receive bitcoin using Lightning and the Bitcoin Network, are not impacted by this update. We remain committed to building innovative, accessible products for customers who use bitcoin on our platform.”

Regulatory Challenges

This is not the first time Block, the parent company of Cash App, has faced regulatory challenges. In 2021, the Financial Market Supervisory Committee of the Bank of Lithuania instructed Verse Payments Lithuania UAB, the European version of Cash App, to verify the identities of customers whose information was either incomplete or did not meet the legal requirements for preventing money laundering and terrorist financing.

Impact on Users

It is unclear how popular Bitcoin peer-to-peer transfers are on Cash App, as the platform does not disclose this data. However, regulatory filings show that the crypto aspect was profitable for the company, with Cash App generating over $65 million in Bitcoin gross profit in Q4 2023, up 90% from Q4 2022.

Tips for Cash App users:

  • Be aware of the changes to Bitcoin transfer features on Cash App.
  • Consider using alternative methods, such as the Lightning Network or the Bitcoin blockchain, to transfer Bitcoin.
  • Stay informed about regulatory developments and their impact on cryptocurrency transactions.

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