OFAC X402 Compliance Guide Part 1
How OFAC screening applies to payments made over x402, a protocol for machine-to-machine transactions.
TL;DR
TL;DR: x402 moves money between agents but does not screen counterparties, so a sanctioned party can be paid by default. Add a sanctions check before the x402 payment so clean parties ALLOW and flagged parties BLOCK.
What x402 does
x402 is a protocol that lets software pay for services in small amounts, priced at $0.05 per check in this screening API's usage model. It handles the transfer but performs no OFAC screening, meaning a payment can reach a listed wallet or SDN name unless a separate check is added.
Where screening fits
The 4-Gate Agent Payment Protocol is SCREEN, SCORE, STOP, STAMP. Before an x402 payment finalizes, run sanctions_check on the counterparty. A clean result ALLOWs the transfer; a flagged result BLOCKs it and the agent stops.
Practical steps
- Run sanctions_check before every x402 payment.
- STAMP the result for audit after a clean payment.
- Use risk_score to flag borderline counterparties for review.