Title: Stablecoin AML Screening: How It Works | Sentvia Source: https://www.sentvia.com/guides/stablecoin-aml-screening Description: Stablecoin AML screening explained: what providers check on the blockchain, how risk is scored, what happens if a payment is flagged and how to avoid holds. --- 1. [Home](https://www.sentvia.com/) 2. [Guides](https://www.sentvia.com/guides) 3. Stablecoin AML screening Guide # How stablecoin AML screening works A stablecoin payment has been held, or you want to make sure yours never is. Stablecoin AML screening is the reason: before a regulated provider converts a payment, it checks where the coins have been and who is behind them. This guide explains what is checked, how risk is scored, what happens when a payment is flagged, and how to keep your payments clear. Last reviewed 19 October 2026 [Begin onboarding](https://onboarding.sentvia.com/) [Talk to our team](https://www.sentvia.com/help) In short_Sentvia_ Who screens Regulated providers that receive or convert stablecoins What The coins’ history on the blockchain, and the people behind the payment If flagged Held while questions are asked Best defence A wallet you control and evidence ready in advance **The question:** what actually happens to a stablecoin payment between the moment it is sent and the moment it becomes money in an account, and what decides whether it goes through? ## What is stablecoin AML screening? Stablecoin AML screening is the set of anti-money laundering checks a provider runs on a stablecoin payment before accepting or converting it. It traces where the coins have been on the blockchain, checks the sending address against risks such as sanctioned addresses, mixers and hacked funds, and verifies who the payer and recipient are. Screening is not specific to one provider. Any business regulated for anti-money laundering that receives stablecoins is expected to do it, and many businesses that accept stablecoins directly run their own checks too. If you only need a quick checklist for screening a single incoming payment, our shorter article on [screening an incoming stablecoin payment for AML risk](https://www.sentvia.com/blog/screen-stablecoin-payment-aml-risk) covers that. This guide goes wider: the whole process, and what to do when it raises a question. ## What screening checks ### The sending address and its history Every stablecoin transfer is recorded on a public blockchain, so a provider can see the address that sent it and trace where those coins came from before that. Blockchain analytics tools match addresses against databases of known entities and flag exposure to: - **Sanctioned addresses** and the people and organisations behind them - **Illicit services**, such as darknet markets, fraud operations and ransomware - **Mixers** and other services designed to obscure where funds came from - **Hacked or stolen funds** traced from known security incidents Exposure can be direct, where the sending address itself is linked to a risk, or indirect, where the coins passed through a risky source one or more transfers earlier. Direct exposure is usually treated far more seriously, but indirect exposure still has to be explained. ### The people behind the payment A blockchain shows addresses, not names. So the provider also checks the counterparties: know your customer (KYC) checks on individuals and know your business (KYB) checks on companies, covering who the client is, who owns and controls it, and who it is paying or being paid by. Names are screened against sanctions lists. For larger payments the provider may also ask how the payer came to hold the stablecoins, which is a question of [source of funds](https://www.sentvia.com/guides/source-of-funds-stablecoin-payments). ## How risk is scored Analytics tools typically turn what they find into a risk rating for the address or the transfer. The rating weighs the kind of risk found, how close it is to the sending address and how much of the payment it touches. What a provider does with that rating depends on its own risk appetite, written into its anti-money laundering programme. In general terms: Result What usually happens No meaningful exposure The payment proceeds Exposure that needs explaining A compliance analyst reviews it and may ask questions before the payment proceeds Serious exposure, such as a sanctioned address The payment is held and may be refused or reported, as the law requires Thresholds differ between providers, and a payment one provider clears may be reviewed by another. A score is a prompt for a human decision, not the decision itself. ## What happens when a payment is flagged A flagged payment is usually held while the provider looks at it. From there, a provider may: - **Clear it** after review, if the exposure is explained or turns out not to matter. - **Ask for evidence**, such as exchange statements, invoices or proof that the payer controls the sending wallet. - **Refuse or return it**, where the risk cannot be resolved or the law does not allow the payment to proceed. Providers may also be required to report a payment to the authorities, and anti-money laundering laws can restrict what they are allowed to tell you about it. If a provider declines to explain a decision, that may be a legal restriction rather than a choice. A held payment takes longer to complete; processing times depend on currency, jurisdiction and bank rails used. ## An illustrative example A business is paid in USDT by a new customer. Screening shows no direct risk at the sending address, but the coins passed through a mixer several transfers earlier. The provider holds the payment and asks the customer how they came to hold the USDT. The customer supplies an exchange statement showing the purchase and the withdrawal to their own wallet, and the transaction hash. The analyst sees the mixer sits further back in the coins' history than the exchange, records the explanation and clears the payment for conversion. The same scenario with no exchange statement, or a sending wallet the customer cannot show they control, may end differently. The evidence is what decides it. ## The Travel Rule, in general terms The Financial Action Task Force (FATF), which sets international anti-money laundering standards, extended its wire transfer rules to virtual assets. Under what is known as the Travel Rule, virtual asset service providers pass information about the originator and the beneficiary along with transfers between them, much as banks do with wire transfers. Each provider can then screen the people on the other side, not just the addresses. Countries implement the standard in their own laws, so the detail varies. In practice, expect a provider to ask who is sending or receiving a transfer, and, where a payment comes from a self-hosted wallet, to ask the sender to show the wallet is theirs. ## How to avoid problems 1. **Send from a wallet you control.** Payments from an address you can prove is yours are the simplest to clear. 2. **Avoid unexplained hops.** Moving coins through several wallets before paying adds history that has to be explained. 3. **Keep exchange statements** showing where you bought the stablecoins and when you withdrew them. 4. **Share source of funds early.** Evidence provided before the payment is sent avoids a hold after it arrives. 5. **Check the network and the address** against the instructions before every payment. ## What this means for your business If you receive stablecoins, screening is part of the cost of being paid in them, and your payers' habits decide how smooth it is. Tell new payers what you will need before they send. If you are subject to anti-money laundering rules yourself, your provider's checks sit alongside your own obligations, not in place of them. On the outgoing side, internal controls matter as much as screening. Sentvia's [payment approval controls](https://www.sentvia.com/platform/controls-and-approvals) let you define approval flows and review transactions in real time before funds are released, so an outgoing payment can need more than one approval before it leaves. ## How Sentvia screens - Every incoming stablecoin payment is screened before it is converted. - For larger payments, we may ask how the payer came to hold the stablecoins. - Every client is verified before an account opens, and every beneficiary is reviewed by our compliance team. - Monitoring runs in real time on every transaction. - A designated Money Laundering Reporting Officer is responsible for our anti-money laundering programme. A request for information is routine, not an accusation. Sentvia Services Ltd is regulated by the Bank of Canada as a payment service provider under the Retail Payment Activities Act and is registered with FINTRAC as a Money Services Business, MSB No. C100000474. Our [compliance and regulation](https://www.sentvia.com/compliance) page explains the obligations behind these checks, and [account and payment security](https://www.sentvia.com/security) covers how screening fits with the rest of our controls. ## Related products Screened stablecoins convert to US dollars, euros, pounds sterling or UAE dirhams and are paid into named accounts in your own name, provided through regulated banking partners. Third-party payments go only to approved beneficiaries. More on the process is in our [guides to stablecoin payments](https://www.sentvia.com/guides). This guide is general information, not legal advice. FAQ ## Common questions What does stablecoin AML screening check? The sending address and its history on the blockchain, including any exposure to sanctioned addresses, illicit services, mixers or hacked funds, and the identity of the people and businesses on each side of the payment. Why was my stablecoin payment held? Usually because screening raised a question the provider needs answered before it can convert the funds, such as where the stablecoins came from. A provider may ask for evidence, then clear the payment, or in some cases refuse or return it. Can a provider tell me why a payment was refused? Not always. Anti-money laundering laws can stop a provider from explaining some decisions, for example where an explanation could prejudice an investigation. What is the Travel Rule? A FATF standard that applies wire transfer rules to virtual assets. Providers sending and receiving transfers between them pass the originator's and beneficiary's details along with the transfer, so each side knows who is paying whom. How can I avoid a payment being held? Send from a wallet you control, avoid unexplained hops between wallets, keep the exchange statements that show where the stablecoins came from, and share source of funds evidence before the payment is sent. Does Sentvia screen every stablecoin payment? Yes. Every incoming stablecoin payment is screened before it is converted, and monitoring runs in real time on every transaction. ## Further reading - [How do I screen an incoming stablecoin payment for AML risk?](https://www.sentvia.com/blog/screen-stablecoin-payment-aml-risk) - [Source of funds for stablecoin payments](https://www.sentvia.com/guides/source-of-funds-stablecoin-payments) - [Why did the seller refuse my crypto payment?](https://www.sentvia.com/blog/why-did-the-seller-refuse-my-crypto-payment) - [How to accept stablecoin payments as a business](https://www.sentvia.com/guides/accept-stablecoin-payments) Get started ## Stablecoin payments, screened before conversion Tell us about the payments you expect and a dedicated onboarding officer will guide you through set-up. [Begin onboarding](https://onboarding.sentvia.com/)[Talk to our team](https://www.sentvia.com/help)