Sanctions Screening in Crypto: Lists, PEPs and Wallets

Which sanctions screening lists matter

Most screening tools check several official lists at once. These four are the ones crypto firms meet most often:

List	Who publishes it	What to know
SDN list	OFAC, US Treasury	OFAC’s best-known list. It also publishes a Consolidated Sanctions List that combines its other lists, and a free Sanctions List Search tool. Under the 50 Percent Rule, a company owned 50% or more by blocked persons is blocked even if it is not named.[1] More in our SDN list guide.
EU consolidated financial sanctions list	European Commission	The Commission maintains the list of persons, groups and entities subject to EU asset freezes, in XML, CSV and PDF. Only the Official Journal of the EU is authentic, and the list can lag behind it.[2]
UK Sanctions List	FCDO (UK government)	Since 28 January 2026 it is the only source for all UK designations. The old OFSI Consolidated List of Asset Freeze Targets closed that day and is no longer updated.[3]
UN Security Council Consolidated List	UN Security Council	Includes all individuals and entities subject to Security Council measures; UN member states must implement them. After its 29 October 2026 update it held 733 individuals and 274 entities.[4]

Which lists bind you depends on where you and your customers are. All US persons must comply with OFAC rules, and some activity by non-US persons that involves the US can be covered too.^[1] Countries under broad embargoes are covered in OFAC sanctioned countries and crypto.

Screening people: KYC name checks and PEPs

The first half of screening is about identity. OFAC recommends screening customer information against its lists at onboarding and re-screening later, because lists and customer data change. It suggests tools with “fuzzy logic” that catch misspellings and spacing variants of listed names.^[1] The KYC data it lists for individuals includes legal name, date of birth, address, nationality, IP addresses and ID documents.^[1] See KYC for cryptocurrency.

PEPs are not a sanctions list

Searches for a “PEPs and sanctions list” mix two different checks. A politically exposed person (PEP) is, in the common industry sense, a foreign individual who holds or held a prominent public function, plus their family and close associates. US regulators note that their AML rules do not define PEPs, that the term does not cover US public officials in their reading, and that not all PEPs are automatically higher risk.^[5]

• Sanctions hit: a match against an official list. Dealing with the person may be prohibited.
• PEP hit: a flag for more due diligence, such as asking about source of funds. It is not a ban.

Screening wallets: direct and indirect exposure

The second half is about the money. Since November 2018 OFAC has listed some crypto addresses as identifiers on SDN entries,^[6] and they can be searched through the “ID #” field of Sanctions List Search.^[1] OFAC warns that these address lists may not be exhaustive.^[7]

That is why wallet screening looks at two kinds of exposure:

• Direct exposure — the address itself is listed, or it sent to or received from a listed address.
• Indirect exposure — the funds reached a listed address through one or more intermediate wallets. TRM Labs, for example, describes multi-hop indirect exposure as a way to find wallets connected to illicit funds that never received them directly.^[8]

OFAC itself points in the same direction: unlisted addresses that share a wallet with a listed one may pose sanctions risk, and firms may run a “historic lookback” after a new address is listed to find past connections, using blockchain analytics.^[1] A detailed walkthrough is in crypto wallet screening; the label itself is explained on our sanctions risk category page.

What the OFAC 2021 guidance expects

OFAC’s October 2021 guidance for the virtual currency industry is the clearest official statement of what “good” looks like. Its main points:

• Same rules as fiat. Sanctions obligations apply equally to crypto and traditional currency.^[1]
• Risk-based program. There is no single solution; it should fit the business, its size, products, customers, counterparties and locations. OFAC names five components: management commitment, risk assessment, internal controls, testing and auditing, and training. Such programs “generally should include sanctions list and geographic screening”.^[1]
• IP geolocation. Firms should be able to use geolocation tools to block IP addresses from sanctioned jurisdictions, and can check IPs against known VPN addresses. OFAC describes a 2020 settlement with a firm that collected users’ IP addresses but did not use them for sanctions screening.^[1]
• Transaction screening. Screen transactions for physical, wallet and IP addresses with links to sanctioned persons or jurisdictions.^[1]
• Strict liability. OFAC can impose civil penalties even when a firm did not know it was dealing with a sanctioned party, though a working risk-based program can count as a mitigating factor.^[1]
• Blocking and reporting. Blocked crypto must be reported to OFAC within 10 business days, and access to it denied.^[1]

How to pick a sanctions screening provider

OFAC does not require any particular in-house or third-party software.^[1] When comparing sanctions screening companies, ask:

1. Which lists, how fresh? SDN and other OFAC lists, EU, UK and UN at minimum, and how fast updates reach the tool. Remember the UK switch to the UK Sanctions List in January 2026.^[3]
2. People and wallets? Name screening with fuzzy matching and PEP data is a different product from on-chain address screening. Many firms need both.
3. Indirect exposure. How many hops it follows, and whether you can set thresholds per category.
4. Re-screening. Can it re-run old customers and old deposits when lists change (the lookback OFAC describes)?
5. Audit trail. Exportable reports that show what was checked and when, for testing and audits.

We do not name a winner here. Providers for exchanges and other firms are compared on our business page; the difference between AML, KYT and KYC tools is in AML vs KYT vs KYC, and the data firms exchange on transfers is in Travel Rule.

What this means for an ordinary crypto user

You are screened even if you never run a check yourself. Exchanges screen your deposits, and Tether says it follows the SDN list and can restrict USDT in wallets tied to illicit activity.^[9] If coins in your wallet passed through a sanctioned address, an AML checker will usually show a “sanctions” share in its breakdown, and an exchange may hold the deposit. See what an AML risk score means and exchange deposit holds.

What to do: a quick sanctions check

1. Before a large trade, ask for the counterparty’s exact address and network.
2. Search the address in OFAC’s Sanctions List Search — a hit there is a hard stop.^[10]
3. Run an AML check to catch indirect exposure that a list search cannot show. Start with our free AML check options or the full services comparison.
4. Read the categories, not just the score. Any sanctions share is a reason to decline; see dirty crypto.
5. Keep the report with your chat and payment records.

Recent cases: OFAC-sanctioned crypto addresses and Garantex and Grinex sanctions.