OFAC screening for crypto exchanges explained

The screening obligations an exchange carries from onboarding through every withdrawal and deposit.

TL;DR

TL;DR: Crypto exchanges must screen users, counterparties, and wallet addresses against the SDN List at onboarding and on every transaction. A deposit or withdrawal that touches a blocked party is a violation, and penalties start at $356,000 per violation.

Onboarding is where most risk is caught

The first checkpoint is customer onboarding: match the user's identity and any controlling owners against the Specially Designated Nationals and Blocked Persons List. The 50 Percent Rule is critical here, because an account that is 50 percent or more owned by a blocked person is itself blocked even if the name on file looks clean.

Transaction monitoring after the account is open

Screening does not stop at signup. Every deposit and withdrawal is a transfer of value, and OFAC is a strict liability regime: intent is not required, so an exchange cannot plead ignorance when a transaction settles with a listed address. Wallet-level screening is now essential because the SDN List includes 947 OFAC-listed crypto wallets at the time of writing.

Automating the checks

agentmail provides the screening layer an exchange can call programmatically. One HTTP call under 100 ms returns clean (ALLOW) or flagged (BLOCK) against 19,218 SDN names and 947 listed wallets across 16 jurisdictions, synced hourly, so the check stays current without manual list upkeep. Paid tiers reach 100,000 checks per month.