KYT & AML Screening

Bag performs real-time Know Your Transaction (KYT) screening on all stablecoin payments. As the Merchant of Record, Bag is responsible for AML compliance — merchants do not need to implement their own crypto compliance tooling.

What Gets Screened

Every stablecoin transaction is checked against:

OFAC SDN List — U.S. Office of Foreign Assets Control sanctions
EU Sanctions Lists — European Union consolidated sanctions
UN Sanctions Lists — United Nations Security Council sanctions
Blockchain analytics — Known illicit addresses, mixers, and flagged wallets
Risk scoring — Transaction patterns associated with money laundering or terrorist financing

Screening Process

Step	What happens	Timing
Pre-transaction	Customer wallet address is checked against sanctions lists	Before checkout completes
Transaction monitoring	On-chain transaction is analyzed for risk indicators	During confirmation
Post-transaction	Ongoing monitoring for retroactively flagged addresses	Continuous

Outcomes

Result	Action	Merchant Impact
Clear	Transaction proceeds normally	None — payment completes as expected
Flagged for review	Transaction is held pending manual review	Payment is delayed; merchant is notified
Blocked	Transaction is rejected or returned to sender	Payment does not complete; merchant is notified

Merchant Impact

No action required — Bag handles all screening automatically
No compliance tooling needed — You don't need Chainalysis, Elliptic, or similar services
Notifications — You receive webhook notifications if a transaction is flagged or blocked
No liability — As the MoR, Bag assumes compliance liability for screened transactions