OFAC screening for Layer 2 projects

What Layer 2 networks and their apps should screen, from sequencer transaction ordering to bridge transfers.

TL;DR

TL;DR: Layer 2 projects should screen at the points where they touch value: sequencer ordering, bridge transfers, and any dApp that moves funds.

Where Layer 2s touch value

A Layer 2 network moves value at several layers: the sequencer orders transactions, bridges move assets between chains, and dApps on top process user payments. Each point is a place where a sanctioned destination could be involved, and OFAC strict liability applies without regard to intent.

Screening at the right points

Add a check where the project has control. A bridge can call sanctionsai.dev's sanctions_check before relaying a transfer, and a dApp can screen before a payout. Each call returns ALLOW or BLOCK in under 100 ms against 947 OFAC-listed crypto wallets and 19,218 SDN names, synced hourly.

Applying the protocol

Use the 4-Gate Agent Payment Protocol of SCREEN, SCORE, STOP, STAMP across these touchpoints. The 50 Percent Rule also applies to Layer 2 projects: an entity owned 50 percent or more by a blocked person is blocked, so ownership-aware screening matters when counterparties are companies rather than raw addresses.