A high-risk wallet (also called a risky address) is a crypto wallet that has been directly or indirectly linked - even once, or a long time ago - to suspicious or illegal blockchain activity.
This can include:
Transactions with gambling platforms
Links to mixers or anonymizing services
Transfers involving scam wallets or blacklisted entities
Activity related to darknet markets or other non-compliant services
How the blockchain detects this
All blockchain transactions are public and permanent.
That means every transaction - including the sender’s and receiver’s addresses - is recorded and traceable forever.
If a wallet address has ever interacted (sent or received funds) with another wallet connected to illegal or high-risk activity, that address becomes flagged as risky in blockchain compliance systems.
Even if the transaction happened a long time ago, or indirectly through another wallet, the connection remains visible on the blockchain.
Because of this, when such an address appears in a new transaction, our automated compliance system may pause or block the operation to protect you and comply with AML/CFT regulations (Anti-Money Laundering and Counter-Terrorism Financing).
Why CityPay blocks high-risk wallets
CityPay is a licensed Virtual Asset Service Provider (VASP) operating under Uzbekistan’s AML/CFT laws.
We are required to prevent any operations linked to illegal or high-risk activity.
If a transaction involves a wallet flagged as risky, it may be automatically frozen and sent for manual compliance review.
This process protects both our users and the platform from potential fraud or scams.
How to stay safe and avoid problems
Always use trusted and verified wallets or exchanges.
Do not send or receive crypto from unknown, gambling, or mixer wallets.
Avoid wallets that have previously been used for scams or high-risk activities.
Summary
A wallet becomes high-risk not only by direct involvement in suspicious activity but also by association - even one past transaction with a compromised address can mark it as risky forever.
CityPay’s system uses blockchain data to detect such links and may automatically pause, or reject, the transaction to protect your funds and maintain compliance.
By using only trusted wallets and clean networks, you help keep your transactions fast, secure, and fully compliant.