Last Wednesday, a Southeast Asian client requested to settle a $12,000 international trade order using USDT-TRC20. For cross-border sellers like us, who frequently use virtual credit cards to run ads and pay store rent, cryptocurrency settlements are nothing out of the ordinary. But this time, the transaction hash the client sent after making the payment showed on the blockchain explorer that the funds had been split and transferred multiple times.<\/p>\n
At the time, I was about to withdraw this USDT directly to a well-known exchange and then use a virtual card from Paddle or Depay to pay for my AWS server fees. But I suddenly had a second thought and decided to check the source of these funds. What I found sent a cold sweat down my back\u2014the funds\u2019 upstream trail was linked to a hacker address associated with stolen funds. If I had deposited them directly into the exchange, my account would almost certainly have been frozen on suspicion of money laundering.<\/p>\n
This incident made me realize that whether you\u2019re handling B2B international trade payments or engaging in virtual credit card arbitrage or credit card abuse, as long as you get involved with cryptocurrency,Anti-Money Laundering Checks for Cryptocurrency<\/strong>It\u2019s a life-saving skill you simply must master. Today, drawing on my own hands-on experience, I\u2019ll teach you how to conduct an effective AML check on a cryptocurrency receiving address.<\/p>\n Many people believe that cryptocurrency is decentralized and that as long as they have their private keys, they have nothing to worry about. But the reality is that all fiat currency deposit and withdrawal channels (centralized exchanges, deposit and withdrawal platforms, and virtual card issuers) are subject to strict regulation.<\/p>\n If you have received coins that are \u201ctainted\u201d (such as funds from the dark web, Ponzi schemes, hacker extortion, or coin mixers) and transfer these coins to an exchange or virtual card platform:<\/p>\n There are many on-chain tracking tools available on the market today, but I don\u2019t recommend that beginners start out by purchasing enterprise-level tools like Chainalysis or CipherTrace, which cost several hundred dollars a month. For individual cross-border e-commerce sellers and independent website developers, I\u2019ve put together a set of low-cost\u2014or even free\u2014practical steps.<\/p>\n When a customer says they\u2019ve already made the payment, the first thing to do\u2014rather than waiting for block confirmation\u2014is to ask for the transaction hash. Once you have the TxID, go directly to Tronscan (Tron blockchain) or Etherscan (Ethereum blockchain), enter it, and locate the sender of the transaction.Source Address<\/strong>. Remember, we need to check not only the client\u2019s direct payment address, but more importantly, the upstream address to which the client is making the payment.<\/p>\n There are three tools I use most often; each has its own focus, so I\u2019ll provide a side-by-side comparison for you:<\/p>\n Take my order from last week as an example: after I entered the source address into MistTrack, it generated a detailed report. The report showed that 32% of funds associated with that address came from high-risk sources (including the Tornado Cash mixer and a fraudulent investment scheme).<\/p>\n In my day-to-day work, I\u2019ve set a clear set of guidelines for myself that you can use as a reference:<\/p>\nWhy is it necessary to conduct AML checks when accepting cryptocurrency?<\/h2>\n
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How Do I Perform AML Checks on Payment Addresses? (Step-by-Step Guide)<\/h2>\n
1. Retrieve the destination address and extract the TxID<\/h3>\n
2. Use tools to perform risk scans<\/h3>\n
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3. Review the risk report and set red lines<\/h3>\n
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Combined with VirtualCardX's Daily Risk Management Recommendations<\/h2>\n