Anti-Money Laundering (AML) protocols are a regulatory requirement in gambling and finance. But in Web3 environments—where users interact through wallets, not bank accounts—AML enforcement looks very different. Instead of traditional identity checks alone, platforms rely on on-chain risk scoring to assess wallets and flag suspicious behavior.
If your withdrawal is delayed or blocked, chances are your wallet’s risk score is the reason. This post breaks down how AML works in Web3 gambling, how risk scoring is calculated, and what users and operators should watch for.
How AML Works in Web3 Gambling
Web3 platforms typically don’t know their users by name. Instead, they interact with wallet addresses. To stay compliant with AML laws, especially when dealing with fiat ramps or licensed jurisdictions, platforms must monitor transaction behavior and source of funds—even without full KYC (Know Your Customer) data.
This is where risk scoring comes in. Third-party tools scan blockchain activity to assign risk levels to wallets, helping platforms make decisions about deposits, withdrawals, and account restrictions.
What Affects a Wallet’s Risk Score
Behavior-Based Factors
Risk scoring tools analyze wallet activity over time, including:
- Interaction with flagged addresses (e.g., mixers, sanctioned entities, known fraud wallets)
- High-frequency transfers that mimic layering tactics
- Use of privacy tools like Tornado Cash or chain-hopping bridges
- Wallet age and volume—new wallets with large deposits raise red flags
- Rapid fund movement post-deposit, which can suggest cash-out behavior
These signals are algorithmically weighted and converted into risk levels (often scored from 0 to 100 or tiered into categories like low, medium, high).
Source-of-Funds Analysis
Even if you’re depositing into a gambling app from a clean wallet, your wallet’s previous inbound transfers matter. If funds originated from a high-risk source—like a hacked exchange or sanctioned country—that risk follows the money.
How Risk Scoring Affects Withdrawals
Platforms use risk scores to apply conditional friction to transactions, especially withdrawals. Here’s how:
- Low-risk wallets: Withdrawals are processed instantly
- Medium-risk wallets: Withdrawals may be delayed or trigger light checks (e.g., email confirmation, wallet provenance check)
- High-risk wallets: Withdrawals are paused pending manual review or require full KYC
This tiered approach lets platforms manage risk without blanket friction for all users.
Table: Typical Withdrawal Logic by Risk Level
| Risk Level | Action Taken by Platform | User Impact |
|---|---|---|
| Low | Instant withdrawal | No impact |
| Medium | Delay + automatic recheck | Wait time (minutes/hours) |
| High | Manual review + KYC required | Delay + document request |
| Very High | Withdrawal blocked or rejected | Funds locked or returned |
What Users Can Do to Lower Risk
- Use fresh wallets for deposits (with clean transaction history)
- Avoid receiving funds from unknown or mixed sources
- Don’t use privacy tools unless the platform explicitly allows them
- Aggregate funds in a known, stable wallet before interacting with gambling apps
- Understand how your wallet’s history affects visibility—even if you’re playing fairly
If you’re flagged, you may be asked to provide wallet provenance (e.g., source exchange, timeline of transfers). Keeping a clean audit trail helps.
Best Practices for Operators
- Integrate third-party wallet scoring tools to flag risk before onboarding
- Create clear withdrawal policies tied to risk levels—automate what can be automated
- Support wallet linking or whitelisting to reward long-term, low-risk users
- Prepare for edge cases—false positives will happen. Offer manual resolution paths.
- Stay compliant with regional AML requirements, especially if using fiat ramps or custodial services
Final Takeaway: Transparency Is the Future of AML in Web3
Risk scoring is becoming the default enforcement tool in Web3 AML—and it’s only getting more sophisticated. For users, the key is understanding that on-chain behavior is permanent and public, even if it feels anonymous. For platforms, risk scoring enables dynamic compliance without blocking everyone behind a wall of paperwork.
The best outcomes happen when both sides know how the system works—and play within its boundaries.