Canonical Statement
Sanctions risk in crypto contexts MUST be assessed using validated sanctions lists and risk-based screening controls across counterparties, services, and exposure pathways, not solely via wallet heuristics.
Definition
Within this framework, sanctions exposure screening is the controlled process of list-based matching, contextual review of direct and indirect exposure indicators, and documented human decisioning for escalation and resolution outcomes.
Why It Matters
Heuristic-only approaches are error-prone and non-defensible. Sanctions controls require list provenance, controlled matching logic, and review traceability to avoid both over-blocking and missed risk.
Failure Mode if Ignored
Decisions are made from labels without verified list context, escalation paths are inconsistently applied, and control outcomes cannot be reconstructed for audit or supervisory review.
Scope & Non-Claims
This entry is scoped to regulated banking environments in the EU/UK and operational interpretation for sanctions exposure screening in crypto contexts.
This entry does not provide legal advice, does not determine legal liability, and requires human validation for final compliance decisions.
Related Concepts
- Crypto red flags and typologies in monitoring (EU) (methodology)
- Transaction monitoring and ongoing due diligence (crypto) (EU) (journey)
- Travel Rule applicability and counterparty information (EU) (regulatory-context)