In 2024 alone, over $1.3 billion in stablecoins were frozen by Tether and Circle. At the same time, one in every 20 stablecoin transactions was linked to suspicious or high-risk addresses. The worst part? You don’t need to break the law to get caught in the crossfire. Just one “dirty” incoming transaction is enough to compromise your entire wallet — leading to frozen funds, blocked accounts, and reputational damage.
In this article, the BitHide team breaks down how AML checks work in crypto and how businesses can stay AML compliant.
Table of Contents
What Are AML Checks and How Do They Work?
AML (Anti-Money Laundering) checks in crypto are designed to detect and prevent the movement of illicit funds. These checks analyze blockchain transactions, wallet addresses, and behavioral patterns to flag suspicious activity, such as links to mixers, sanctioned entities, or previously identified scam addresses.
Modern blockchain analytics platforms like Chainalysis, Crystal, and Bitrace scan every transaction and assign a risk score based on its origin, flow history, and destination. Many stablecoin issuers and exchanges now rely on these tools to freeze or block assets tied to high-risk wallets, even if the receiver has no connection to illegal activity.
Case Study: When a Legitimate Business Had Its Assets Frozen
In 2024, a crypto-friendly company received a routine ETH payment from a client in Asia. A month later, their account on the Gemini exchange was frozen without warning.
The reason? The funds had previously passed through Tornado Cash, a sanctioned mixing service. Although the company had no ties to it and no knowledge of the funds’ origin, the transaction was flagged as high-risk by the exchange’s AML system.
As a result, over $100 000 was locked. After months of back-and-forth, only part of the amount was recovered — the rest remained frozen.
This case highlights a harsh truth: even one suspicious transaction can lead to serious consequences, regardless of your intent. Without proper screening, your business is vulnerable.
How to Protect Your Company’s Crypto Assets
To avoid freezes and reputational risk, it’s critical to monitor all incoming assets. What matters most is identifying high-risk funds early and keeping them separate from clean ones. This allows your business to manage each type of asset properly and avoid accidental violations.With the BitHide crypto gateway, you can choose between fully automated AML checks for all incoming funds or run them manually on a case-by-case basis. This crypto wallet helps you act quickly and keep questionable crypto isolated without disrupting your overall operations. Also, you can set up your own AML settings and define what crypto is high-risk for your business.
