AML and USDT TRC-20: how crypto compliance checks detect tainted funds

AML (Anti-Money Laundering) — international rules against money laundering. If in the past they applied only to banks, today they also extend to crypto. This is especially relevant for transfers in USDT TRC-20 — the most popular stablecoin on the TRON network.

What’s important to know about AML and USDT TRC-20

• Checks are carried out not only by banks, but also by exchanges, payment services, and P2P platforms.
• Every transaction in TRON is visible: anonymity is relative.
• Coins may get “stuck” if they come from an address marked as suspicious.
• A simple self-check often saves you from freezes and unnecessary questions.

In reality, everything works tougher than newcomers expect. Imagine: you sold USDT on P2P, deposited them to an exchange — and the deposit was frozen. Not because you broke the rules, but because of the sending wallet’s history. You can sort it out, but it takes time and nerves. That’s why knowledge of AML in crypto today is no less important than knowing how to use a wallet.

Anti-money laundering rules in crypto are not total surveillance, but a system of filters looking for suspicious operations. Exchange algorithms literally check through which wallets your money passed and whether a “tail” of dubious transactions is attached to them. If the chain includes addresses linked to darknet, hacks, or sanctions, the deal automatically falls into the risk zone.

To make such checks work, exchanges and services use two main tools:

• KYC and identification in crypto (Know Your Customer). Without a passport or ID it’s no longer possible: the exchange must understand who is behind the account.
• Blockchain analytics. These are services that build transaction maps and tag addresses. Market leaders — Chainalysis and TRM Labs — are used not only by crypto platforms, but also by major banks and regulators in the US and EU.

Suspicion may arise from:

• “running” coins through mixers to hide chains;
• too many identical transfers in a row (e.g., 50 transactions of 100 USDT within an hour);
• wallet ties to phishing sites or hacking attacks;
• transfers directly or indirectly to addresses under sanctions and USDT freezes.

If the exchange’s compliance system sees at least one red flag (mixer, sanctions ties, phishing), the deposit is paused for manual review and a document request.

There is nothing more massive in crypto than USDT transfers on the TRON network. By summer 2025, according to CoinDesk, the volume of stablecoin on TRON surpassed $80 billion, and the network has long outpaced Ethereum. Messari’s quarterly report confirms: more than 50% of all USDT circulates on TRON, while Ethereum’s share is already less than 40%.

This means a simple thing: if you transfer USDT, you are most likely doing it via TRC-20. And that’s why this network is the primary focus of all AML systems.

Why TRON is under special control:

• half of the global USDT turnover flows here — too large not to monitor (crypto transfer monitoring);
• it is the “everyday transfer network” — P2P settlements, freelancer payments, business transfers;
• USDT is centralized: the company Tether can freeze tokens on suspicious addresses;
• TRON blockchain transparency makes the job easier for analysts and regulators — most activity is concentrated in one ecosystem.

For users, this means duality. On the one hand, TRON is the most convenient and popular settlement network. On the other — this is where most checks and freezes occur, and the chance of encountering a “suspicious” address is higher than anywhere else.

Exchanges use risk filters: addresses are tagged and scored based on their own databases, analyst reports, and law enforcement alerts. If the chain has ties to sanctions, phishing, hacks, or mixers, the deposit is paused and sent to manual review with a request for documents.

There are also open signals in TRON. On TRONSCAN, users can flag wallets and tokens as “phishing” or “fraud”. This is not a final verdict, but a reason for additional checks by the exchange.

Another feature lies in USDT itself. The token issuer, Tether, can freeze coins on specific addresses. In 2025, several wallets holding millions of dollars were frozen after analysts linked them to hacks or scam schemes.

In reality, checks are triggered by very clear situations:

• you received a transfer from a wallet already flagged in phishing or sanctions lists;
• the address shows dozens of identical large transfers in a row (AML requirements in 2025 tightened this criterion);
• a mixer or dubious exchanger is used.

In such cases, the exchange usually requests supporting documents: chat logs, deal screenshots, contracts, or invoices. Sometimes funds are returned to the original address, sometimes held until the review is completed.

At the blockchain level, it’s simple: a TRON transaction always goes through, nobody cancels it. But then other rules apply:

• the issuer can freeze tokens at a specific address (AML with USDT transfers);
• the exchange can put a deposit on hold if it sees links to suspicious wallets.

To make it clearer, a real-life example.

A freelancer receives project payment — $800 in USDT TRC-20. The money arrives quickly, the wallet shows the balance, everything looks fine. He deposits the coins to an exchange to convert to fiat, and suddenly — surprise: deposit frozen. Support writes: “We need proof of funds’ origin.” It turns out the client’s address had previously been involved in transfers flagged as “suspicious.” Now the freelancer has to gather chats, screenshots, and explanations, while the money is stuck indefinitely.

Such stories are not rare. Similarly, AML checks hit P2P trading: the counterparty sends dirty coins, and the problem lands on the one who brought them to the exchange.

In the AML world, it’s easier to play the role of your own “compliance officer” than to later explain to the exchange where your coins came from.

What really works:

• Check addresses on TRONSCAN. Enter the wallet — review history, tags, suspicious activity. Mass small transfers or interactions with shady contracts are a “stop” signal.
• Track the Tether blacklist. Dashboards and third-party services show whether an address was blacklisted. Not a guarantee, but a good indicator — wallet cleanliness check.
• Look at events in the USDT contract. Tags like addBlackList or freeze are a red flag.
• Use trusted P2P platforms. They have filters and seller reputations (compliance for P2P deals). Easier to resolve disputes there.
• Avoid mixers and “shadow” exchangers. Such steps almost automatically increase your risk score (crypto AML risk).
• Keep a “deal dossier.” Chat screenshots, invoices, details. For the exchange, this is proof everything is clean.
• Test with small amounts. First $10–20, then the main sum. Cheaper to catch a “dirty” address early.
• Separate wallets. Better to keep personal and business flows apart, so client funds don’t mix with your own.
• Check permissions. In TRONSCAN you can revoke suspicious approvals. Exchanges often remind in guides: check URLs, update rights, don’t hand out access recklessly.

And above all, remember USDT is centralized. Tether has repeatedly frozen addresses and does it more often now. If you’re actively moving volumes (for example, in P2P arbitrage), build infrastructure with safety margins: connect via a public address without a seed phrase, automate counterparty checks, and keep accurate flow documentation. That’s your “home AML,” protecting you from problems before the exchange steps in.

AML in crypto in 2025 is no longer just about banks. In crypto it’s the same: USDT TRC-20 transfers are transparent to analytics, and exchanges are obliged to check their cleanliness. The TRON network has become the main settlement layer in stablecoins — which means it’s under the most scrutiny.

To stay out of trouble:

• check addresses before transfers;
• avoid mixers and gray exchangers;
• keep trade history and chats.

The user’s task is simple — minimize risks before the exchange has questions. Two minutes of self-check today easily save hours of disputes tomorrow and may protect you from hundreds of dollars frozen.