OFAC Kyc Aml Glossary Part 1

A concise definition of KYC and AML and how these controls relate to OFAC sanctions screening for agent payments.

TL;DR

TL;DR: KYC (know your customer) and AML (anti-money laundering) are identity and transaction controls used to detect financial crime. OFAC screening is the sanctions-specific check that tells an agent whether a counterparty may be paid.

What KYC and AML mean

KYC is the process of verifying who a customer or counterparty actually is. AML refers to the broader set of controls, including monitoring, that prevent money laundering. In the sanctions context, these overlap with screening against the SDN List, the Specially Designated Nationals and Blocked Persons List maintained by OFAC, the Office of Foreign Assets Control.

Why they matter for agent payments

An AI agent that pays on a user's behalf inherits these obligations. Payment rails such as x402, AP2, ACP, and Coinbase AgentKit move funds but do not screen the recipient. The sanctionsai.dev API adds the missing check: one HTTP call under 100 ms that screens the counterparty and returns ALLOW for clean or BLOCK for flagged.

Practical guidance

Treat KYC as identity verification and AML as ongoing monitoring, then layer OFAC screening on top before each payment. The product provides live data covering 947 OFAC-listed crypto wallets, 19,218 SDN names, and 16 jurisdictions, synced hourly. A free tier offers 5 checks per day with no signup and no key. Not documented: any specific KYC vendor the platform integrates with.