What is USDT AML screening

USDT AML screening is the analysis of wallets, transactions and links related to the Tether (USDT) stablecoin to identify money laundering, use by sanctioned entities, terrorist financing and other prohibited organizations, association with fraud and other forms of financial crime.

Analytics services continuously monitor addresses and assign a risk category to each of them. When a user creates a new address on the TRON (TRC-20) network, it initially has no risk category. After the first transaction, however, this address inherits the risk category of the sender. If you receive USDT from a licensed cryptocurrency exchange, your wallet will be tagged as 100% Exchange and assigned a “green” risk level. A wallet with history usually has a more complex risk structure because it accumulates a large number of links. Such wallets can have more than two, and often 10–15, risk groups. Below are examples of AML screening results for addresses with different risk levels: low, medium and high. The screenshots show how the overall risk score, the set of risk categories and the breakdown of sources of funds change depending on the transaction history of the address.

The USDT issuer (Tether) itself acts as a de facto regulator and enforcement body. When Tether “mints” new USDT, the tokens are completely clean and do not inherit any labels. At the same time, Tether has the authority to freeze tokens in order to comply with the law or enforce a valid order. One of the most striking examples is the freeze of about 25M USDT held on the sanctioned platform Garantex (we covered this in another article).

AML services and the tasks they address

One of the most effective measures to combat illegal activity is to control and block financial flows of persons or organizations involved in it. At the same time, blocking funds without grounds is also a violation of the law. To solve the tasks of building an evidentiary base, an industry of services for checking addresses for links to illegal activity has grown up alongside the cryptocurrency industry. Today, working with cryptocurrency without such analytics tools carries significant risks. In addition to helping detect and trace illicit funds, these services also help individuals and organizations prevent the processing of such funds, reducing the risk of being drawn into a criminal chain of concealment and laundering.

In general, services for USDT AML screening solve the following tasks:

• wallet screening – checking addresses to identify links to known risk sources;
• monitoring incoming and outgoing transactions in real time and building a risk map;
• matching on-chain data with off-chain information (ownership by individuals, groups or organizations);
• preparing reports for regulators, law-enforcement agencies and the client’s internal compliance team;
• supporting investigations – visualizing transaction graphs, identifying beneficiaries, etc.

Below are the most well-known and proven solutions that are actively used for AML screening of USDT and other stablecoins.

Chainalysis

Chainalysis is one of the best-known providers of blockchain analytics and AML solutions, used by exchanges, fintech companies, banks and government agencies.

For USDT, the following products are relevant:

• Chainalysis KYT (Know Your Transaction) – a platform for real-time monitoring of crypto transactions. It tracks operations, assigns them a risk level and generates alerts within seconds after a transaction is made.
• Reactor – an investigation tool that allows you to build transaction graphs and trace chains of USDT and other assets between wallets and services.
• Sentinel – a solution for monitoring token and stablecoin operations that complements KYT with automated blocking scenarios and additional monitoring of token issuance and redemption.

Chainalysis is widely used by stablecoin issuers, including Tether, which makes it one of the de facto industry standards for AML monitoring of USDT.

It is also important to note the role of Chainalysis on the market: its solutions are used not only by crypto exchanges and fintech companies but also by major government bodies.

According to an investigation by Vice based on U.S. public procurement records, the FBI, the Drug Enforcement Administration (DEA) and Immigration and Customs Enforcement (ICE) purchased Chainalysis software to track crypto payments.

Coindesk separately describes the company’s multimillion-dollar contracts with the U.S. government and notes that the FBI and the Internal Revenue Service (IRS) were among Chainalysis’s first federal clients.

In a Fortune article it is stated that Chainalysis now works with around 330 government agencies worldwide, and in one of its case studies the company shows how its tools helped the FBI trace and recover part of the cryptocurrency in a ransomware case involving Caesars Entertainment.

Against this backdrop, Chainalysis is reasonably perceived as one of the key leaders in the market for blockchain analytics and AML monitoring solutions, including for USDT operations.

TRM Labs

TRM Labs is a platform for blockchain transaction analytics and risk management. Its product line includes several key solutions:

• TRM Transaction Monitoring – monitoring of deposits and withdrawals with customizable rules and alerts for compliance teams.
• TRM Wallet Screening – real-time wallet screening with flexible risk profile configuration and risk categories (sanctions, scams, etc.).
• TRM Forensics – an investigation tool with visualization of fund flows across blockchains and an extensive database of labeled addresses.
• A specialized Stablecoin Risk Management solution for monitoring risks related to stablecoins on 90+ blockchains.

According to the official website, TRM Labs solutions are used by government agencies, financial institutions and crypto businesses around the world. In press releases and external reviews, TRM is described as a blockchain analytics provider “trusted by financial institutions, crypto companies and law-enforcement agencies” to identify and prevent crypto financial crime.

A particularly strong area for TRM is sanctions compliance. In 2022, the company launched a free API for sanctions screening of crypto addresses that allows users to track interaction with addresses from sanctions lists, including those connected with Russian entities, and was initially positioned with extended cross-chain coverage.

The second key advantage is analytics related to darknet markets and drug trafficking. In its review “Category deep dive: Illicit drug sales grew and expanded outside of darknet marketplaces in 2024”, TRM estimates the volume of online drug sales for cryptocurrency at nearly USD 2.4 billion in 2024 and shows that more than 97% of turnover in bitcoin and TRON is linked to Russian-language darknet marketplaces. These data are widely cited in external analytical materials as a reference for the structure of the illegal market.

TRM Labs also demonstrates close cooperation with law-enforcement agencies. In a case study on a joint operation by the U.S. Department of Justice and the FBI’s Phoenix office, TRM describes how its tools helped trace and seize about USD 112 million in cryptocurrency linked to “pig butchering” fraud schemes.

In the context of USDT AML screening, TRM Labs can be viewed as a solution that covers standard scenarios for transaction monitoring and wallet screening, but is especially strong where work with stablecoins requires simultaneous control of sanctions risks and transaction chains linked to darknet markets, drug trafficking and complex fraud schemes.

Elliptic: Navigator, Lens

Elliptic is one of the first major services for blockchain analytics and control of crypto transactions. The company’s main products are:

• Elliptic Navigator – a system for real-time monitoring of crypto transactions. It helps to identify complex chains of transfers related to money laundering, terrorist financing, sanctioned entities and other forms of financial crime.
• Elliptic Lens – a service for wallet and address screening. It shows the risk level and links of an address to exchanges, services, darknet marketplaces and sanctioned counterparties.

The Elliptic website states that its solutions are used by banks, crypto exchanges, law-enforcement agencies and regulators to screen clients, monitor operations and investigate suspicious transfers.

The company particularly emphasizes its work with sanctions and major criminal cases. In an official Elliptic release and in PRNewswire coverage, it is described how Elliptic data were used by the U.S. Secret Service in an investigation into the sanctioned Russian crypto exchange Garantex: the analytics helped identify its infrastructure connected with ransomware, darknet markets and sanctions evasion.

In the context of USDT AML screening, Elliptic can be characterized as a platform that combines standard functions for transaction monitoring and wallet screening with strong expertise in sanctions risks, darknet services and other clearly criminal scenarios.

Crystal Intelligence

Crystal Intelligence is a blockchain analytics service that combines transaction monitoring and tools for investigating suspicious operations with cryptocurrencies. Crystal helps identify illegal financial flows, track the movement of crypto assets and support AML compliance. The platform includes:

• a tool for analyzing transactions and visualizing fund flows between addresses;
• a compliance solution with risk monitoring, alert configuration and assessment of exposure to sanctioned addresses;
  
  
• the public Crystal Lite service, which allows users to check a limited number of addresses for free, see links to risky and sanctioned wallets and assess the risk level.

In July 2025, Tether announced a strategic investment in Crystal Intelligence. In Tether’s official release and in the news from Crystal and industry media, it is stated that the goal of the investment is to strengthen tools for monitoring, investigating and combating illicit use of stablecoins, as well as to support law-enforcement agencies and regulators.

Because of this, Crystal stands out as a solution that works deeply with stablecoins and USDT operations: the platform combines detailed analysis of transaction chains, assessment of sanctions and other risks, and a direct focus on the tasks of the issuer Tether and law-enforcement agencies.

Other solutions

In addition to large blockchain analytics platforms, there is a layer of integration services. Such solutions connect several analytics providers at once (Chainalysis, Elliptic, TRM Labs, Crystal, etc.) and use their data within a single interface. The client does not need to sign separate contracts with each provider and handle technical integration on their own – they get access to address and transaction checks through a single partner who takes on the work with multiple data sources and the configuration of screening rules. These platforms are especially convenient for smaller services and retail clients for whom it is not economically viable to connect large B2B solutions directly.

How to choose a service for USDT AML screening

When choosing an AML service for working with USDT, you should assess the following characteristics:

• Coverage of stablecoins and networks. For USDT it is critical that TRON, Ethereum, BSC, Solana, TON and other popular networks are supported.
• Quality and completeness of the risk database. It is important to understand which data sources are used, how often the data are updated and how the risk score is calculated.
• Types of scenarios. Support for transaction monitoring, wallet screening, investigations and work with stablecoin issuance.
• Reporting and regulators. The ability to generate reports that meet the requirements of your regulator and internal compliance function.

In practice, many companies combine several services – for example, one for transaction monitoring and another for in-depth investigations.

Conclusion

Services for USDT AML screening have already taken their niches: some are better at sanctions checks, others excel at identifying suspicious schemes and analyzing complex transaction chains, and others focus on regulatory reporting and work with stablecoins. Relying on a single tool over the long term is usually not enough. For a resilient control system, it is reasonable to use several services, compare results and understand where each of them is stronger, especially if the business is growing and processes significant volumes of USDT.

As the company scales, it makes sense not only to connect external solutions but also to build its own internal knowledge base and risk map. Based on data from AML providers, transaction history and client behavior, you can develop your own rules, understand business-specific patterns and detect anomalies faster. External tools remain the foundation, but internal analytics can significantly improve decision quality.

At the same time, any AML approach has an important limitation: a wallet usually enters “blacklists” only after the crime has occurred and information about it has reached the analysts. Address labeling always lags behind slightly. Therefore, passive checks alone are not enough – it is important to design rapid response scenarios in advance, configure triggers for suspicious operations and regularly update monitoring rules to reduce risks not only retrospectively but also at early stages.

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