Sanctions Screening
Sanctions screening is the check a business runs on a person, company, country or wallet address to see whether it appears on a government sanctions list. If there is a match, the business has to stop, review or refuse the transaction, depending on the rules that apply to it.
Which lists and what gets checked
Sanctions come from bodies such as the United Nations, the European Union, the UK and the US Office of Foreign Assets Control (OFAC). OFAC's Specially Designated Nationals (SDN) list names individuals and entities, and for crypto it also lists wallet addresses. Which lists apply to you depends on your jurisdiction and activity, so ask your compliance adviser.
A screening program usually checks three things:
- People and companies, at onboarding and again when lists change. This overlaps with KYC.
- Locations, such as the country a customer or counterparty operates from.
- Wallet addresses, before accepting funds from them. See wallet address screening.
A match is not always a true hit. Names are common, so teams review the match, record the decision and keep the evidence for audits.
Why Lightning needs its own approach
On Lightning, you do not only pay or receive. You also open channels with peers and route payments for others. Each channel is funded from an on-chain address, and each peer runs a node at an IP address. A screening process that only looks at the final payer misses these links. Sanctions screening is one part of a wider AML program, and it works best when automated.
How Amboss handles sanctions screening
Reflex is the Amboss product for this. According to the Reflex product page, it:
- screens channel peers by IP address and by funding source against sanctions lists;
- checks channel funding source addresses against the OFAC SDN list;
- analyses the geographic location and jurisdictional risk of the nodes you transact with, so you can set risk policies that fit your own requirements;
- sends alerts and produces exportable audit reports, so you can show an auditor or legal team that your policy was applied the same way each time.
Magnolia Financial, a Bitcoin-native company focused on onramp and custody, announced in April 2025 that it would use Reflex in its Lightning operations, including real-time sanctions screening and risk monitoring (see the announcement).
Reflex is being integrated into Amboss Rails so that payments processed through Rails can be screened as well. Amboss's own guidance for payment providers is that Reflex supports your risk controls, but your business stays responsible for its compliance obligations. Reflex is a tool, not legal advice.
You can start with credits and no sales call, or talk to the team about volume. See the Reflex page.