KYC vs OFAC screening: What's the difference?

KYC verifies who a customer is; OFAC screening checks whether a counterparty is sanctioned. They answer different questions.

TL;DR

TL;DR: KYC and OFAC screening solve different problems. KYC confirms identity; OFAC screening checks a counterparty against the SDN List before a payment.

KYC: who are you

Know Your Customer checks verify a customer's identity, typically by collecting documents and confirming the person behind an account. KYC is about establishing who someone is and, often, their source of funds. It is a customer-onboarding step performed at the start of a relationship.

OFAC screening: are you sanctioned

OFAC screening asks a narrower question: is this counterparty on a sanctions list? It checks a name or wallet against the SDN List and returns a clean or flagged result. sanctionsai.dev does this in one HTTP call under 100 ms, screening 19,218 SDN names and 947 OFAC-listed crypto wallets. OFAC screening should run before every payment, not just at onboarding.

Why both matter

KYC alone does not stop a payment to a sanctioned party, and a list check does not verify identity. The two controls are complementary. For agent and crypto payments where there is often no identity document at all, screening is the control that still applies, because OFAC strict liability does not depend on knowing the customer.