Cryptocurrency regulation crisis: wallet verification

Introduction

AML (Anti-Money Laundering) screening is becoming an integral part of working with cryptocurrencies. Regulators are tightening requirements, introducing sanctions, and imposing heavy fines for non-compliance. At the same time, using so-called "dirty crypto" can lead to account blocking, freezing of funds, or even legal liability. In this guide, we will look at how to minimize risks and check a wallet for AML compliance.

Why Is Wallet Checking Important?

Every transaction in the blockchain leaves a digital footprint. If the wallet you are interacting with is linked to illegal activities such as money laundering, terrorist financing, or hacking attacks, your assets may be frozen.

Main Risks

• Sanctions Tags: Addresses included in the blacklists of regulators or related organizations are subject to monitoring.
• Dirty Crypto: Funds originating from hackers, mixers, or other suspicious sources may be flagged as high-risk.
• Account Blocking: Exchanges and banks block transfers from addresses that have not passed KYC or are linked to illegal activities.

Step-by-Step Wallet Check for AML Compliance

1. Use Specialized Tools

To check address history and its risks, there are services such as:

• Chainalysis: One of the most popular tools for transaction analysis and identifying suspicious activities.
• Etherscan: Allows you to analyze a full list of operations and check address tags.
• Crystal Blockchain: Suitable for professional monitoring and risk assessment.

2. Check Transaction History

Look out for the following signs:

• Use of Mixers: If an address actively interacts with services that hide the origin of funds, this can be a red flag.
• Multi-hop Transfers: Funds that have passed through many addresses in a short period of time are often used to conceal the source.

3. Compare the Address with Sanctions Lists

A number of platforms, such as OFAC, publish sanctions lists that include addresses linked to illegal activities. Ensure that the wallet you intend to work with is not present in such databases.

4. Conduct Regular Monitoring

AML screening is not a one-time procedure. Addresses can be blacklisted over time. Regular checking helps avoid surprises.

How to Protect Yourself from Risks

For Users

• Check addresses before transferring. Ensure that the counterparty has passed an AML check.
• Use regulated exchanges. Keep assets on platforms with transparent KYC/AML policies.
• Keep transaction confirmations. In case of requests from regulators, this will help prove the "cleanness" of the funds.

For Business

• Implement automated systems. For example, the Chainalysis API for real-time address monitoring.
• Regularly update compliance policies. Keep track of changes in MiCA and FATF (e.g., the "Travel Rule").

Conclusion

AML screening is not just a recommendation but a necessity in the context of tightening cryptocurrency regulations. By using specialized tools and following simple rules, you can minimize the risks associated with using "dirty crypto" and secure your assets.

Regular wallet checks, knowledge of legislation, and choosing reliable platforms are your key steps toward financial security.