In card payments, sanctions screening happens upstream. Banks and acquirers check before funds settle, and a bad payment can often be reversed.
Crypto payments break that model. The person paying often has no direct relationship with the merchant or the PSP, and once a transaction is confirmed onchain, it can't be reversed.
For PSPs and merchants in high-risk verticals like iGaming, that changes when sanctions screening for crypto payments has to happen: before funds move, not after.
Why card-style screening doesn't carry over to crypto
Card payments come with layers of protection. A payment can be held, reviewed, and, if needed, reversed. Crypto payments have none of that once they're confirmed.
If screening only happens after the funds arrive, the best you can do is contain the problem. You can't send the payment back to where it came from.
Blocking vs freezing: why timing matters
There's a big difference between blocking a payment and freezing one.
- Blocking happens before execution. No funds move, so there's nothing to unwind.
- Freezing happens after the fact. The transaction has already happened, the funds have to be immobilised, and depending on your jurisdiction, reporting obligations may follow.
For a regulated PSP, that difference can decide whether a sanctions hit is a non-event or an incident to manage. iGaming feels it most, because the vertical already sits under heavy AML scrutiny.
How pre-transaction screening works
WalletConnect Pay runs screening inside the payment flow, before the payment clears:
- Wallet addresses are screened against OFAC sanctions lists.
- The player's IP is checked against the restricted regions you define.
- The result is returned to your systems, and the outcome follows the policy you configure.
Because the check runs before the payment executes, a flagged payment never reaches you.
Travel Rule data, captured once
Where Travel Rule requirements apply, WalletConnect Pay captures the required data inside the payment flow, including full legal name, date of birth and country or place of birth, with fields configurable to your requirements.
Details are collected once at the first payment and reused, so returning players go straight to confirmation.
What pre-transaction screening doesn't replace
Screening at the point of payment doesn't replace your AML programme, your KYC or your ongoing monitoring. It gives that programme cleaner inputs, earlier, and stops prohibited payments from reaching you in the first place.
What is pre-transaction sanctions screening for crypto payments?
It's screening that runs before a crypto payment executes, so a payment from a sanctioned wallet or restricted region can be blocked before any funds move.
Can crypto payments be reversed?
No. Once a crypto payment is confirmed onchain, it's final, which is why screening needs to happen first.
Does WalletConnect Pay screen against OFAC sanctions lists?
Yes. Wallet addresses are screened against OFAC sanctions lists, and IPs are checked against restricted regions, before the payment clears.
Who decides what happens when a payment is flagged?
You do. The result is returned to your systems, and the outcome follows the policy you configure.