Agent-Native Crypto Compliance: Build KYA/KYT with X402

Crypto compliance is no longer optional—it is a foundational requirement for teams interacting with on-chain assets. With risks such as sanctioned addresses, scam flows, mixer exposure, and cross-chain fund movement, organizations must understand who they’re transacting with and how funds move to ensure safety and regulatory alignment.

Meanwhile, a new actor is emerging: AI agents. These agents analyze on-chain data, execute transactions, and make real-time decisions autonomously. Once an AI agent touches real funds, it requires the same (or higher) level of protection as humans—KYA (Know Your Address) and KYT (Know Your Transaction) built directly into its decision-making loop.

This raises a key question:

How do we provide compliance-grade risk intelligence to autonomous agents in a way they can actually consume?

The answer is X402.

Why X402 Matters for AI-Native Compliance

X402 is a lightweight, internet-native payment protocol that embeds cryptographic micro-payments directly into HTTP requests. When paired with crypto compliance APIs—such as address labeling or deep risk analysis—it transforms them into:

machine-payable
stateless
agent-friendly
permissionless
pay-per-call intelligence endpoints

In this article, we demonstrate how to build an AI-ready, X402-enabled “Crypto KYA” API using https://x402.blocksec.ai as a real-world example. This architecture represents the future of agent-native crypto compliance.

The Modern Crypto Compliance Stack

Crypto compliance generally involves three layers. Using BlockSec’s MetaSleuth (labeling + light screening) and Phalcon Compliance (deep risk analysis), we outline the stack below.

1. Address Labeling (KYA) — MetaSleuth

The Address Label API returns essential attribution for blockchain addresses, including:

Entity name
Address category (exchange, mixer, scam, protocol, etc.)
Behavioral metadata

Supporting 25+ blockchains (Ethereum, Solana, Bitcoin, Tron, BNB, EVM networks), labeling forms the foundation of Know Your Address (KYA).

Learn more: MetaSleuth API Reference – https://docs.metasleuth.io/blocksec-aml-api/address-label-api/apis

2. Light Address Screening — MetaSleuth

Light screening provides a quick risk assessment with:

Numerical risk score
Risk indicators
Exposure factors (scam, mixer, sanctioned proximity, etc.)

This is useful for wallets, bridges, and basic compliance requirements.

3. Deep Multi-Hop Screening (KYT) — Phalcon Compliance

Light screening is limited—it only evaluates direct (1-hop) interactions. It cannot satisfy institutional KYT requirements because it:

Misses multi-hop fund exposures
Cannot follow FATF-aligned tracing logic
Fails on indirect flow analysis
Does not aggregate cross-chain movements

Phalcon Compliance fills the gap with:

Multi-hop fund tracing (KYT)
Cross-chain risk aggregation
Entity correlation
FATF-aligned risk scoring

Learn more: https://blocksec.com/phalcon/compliance

This deep layer is essential for exchanges, custodians, payment processors, and institutional compliance.

Why Traditional Compliance APIs Fail for AI Agents

Most compliance APIs were designed for enterprises—not autonomous software. They require:

API keys
Monthly subscriptions
Fixed usage tiers
Dashboard accounts
Credit-card billing
Long-term identity

AI agents, however:

May make 1 call today and 300 tomorrow
Operate intermittently
Spin up ephemeral instances
Perform checks only when needed
Have no notion of “account” or “billing cycle”

Traditional compliance APIs are fundamentally incompatible with AI agents.

How X402 Fixes This

X402 turns each HTTP request into a self-contained, cryptographically paid transaction.

When an agent calls:

GET /screen/deep/tron/{address}

…it attaches a signed X402 payment proof.

Meaning:

❌ No API key
❌ No subscription
❌ No dashboard
❌ No credit card
✔️ Only on-demand, pay-per-call usage

This is why X402 is the native payment layer for agent-driven crypto compliance.

Learn more: https://docs.cdp.coinbase.com/x402

Building an X402-Enabled KYA/KYT Endpoint

Below is a minimal example of how to convert a Python FastAPI endpoint into a machine-payable, X402-protected service—just like x402.blocksec.ai.

1. Setup: Get the API Key

You need a Coinbase CDP API key + secret, used to verify payment proofs.

2. Initialize X402 Middleware

from fastapi import FastAPI
from x402.fastapi.middleware import require_payment
from cdp.x402 import create_facilitator_config

app = FastAPI()

facilitator_config = create_facilitator_config(
    api_key_id=CDP_API_KEY_ID,
    api_key_secret=CDP_API_KEY_SECRET,
)

app.middleware("http")(
    require_payment(
        path="/screen/deep/*",
        price="$1.00",
        pay_to_address=ADDRESS,
        network="base",
        facilitator_config=facilitator_config,
    )
)

Note: a wildcard path like /screen/deep/* cannot distinguish between /screen/deep/A and /screen/deep/B, which may cause security issues. Use the x-resource header for strict resource separation (not covered in this blog).

3. Return Results

async def phalcon_wallet_deep_screening(chain: str, address: str):
    chain_id = resolve_chain_id(chain)
    payload = {
        "chainId": chain_id,
        "address": address,
        "enableReScreening": False,
        "includeDetails": False
    }

    headers = {
        "API-Key": PHALCON_WS_API_KEY,
        "Content-Type": "application/json",
    }
   
async with httpx.AsyncClient(timeout=10) as client:
        resp = await client.post(PHALCON_WS_API_URL, json=payload, headers=headers)
        resp.raise_for_status()
        return resp.json()

4. Add Router

@app.get("/screen/deep/{chain}/{address}")
async def screen_wallet_deep(chain: str, address: str, request: Request):
    data = await phalcon_wallet_deep_screening(chain, address)
    return data

Using the Live Demo at x402.blocksec.ai

The implementation described above is live at: 👉 https://x402.blocksec.ai

This demo includes fully operational, machine-payable KYA/KYT endpoints backed by BlockSec intelligence.

Available Endpoints

Address Labeling — /label/{chain}/{address}
Light Screening — /screen/light/{chain}/{address}
Deep Screening — /screen/deep/{chain}/{address}

Example Deep Screening

https://x402.blocksec.ai/screen/deep/tron/TYXqLb9ZyAeJeTFkt3Tx7kNyc3HufjvnMs

You will see a standard 402 Payment Required response—this is how X402 negotiation works for agents.

Using with an X402-Compatible Client

Traditional HTTP clients cannot complete the request. You must use:

an AI agent
a crypto wallet
the Coinbase CDP SDK
an X402-enabled runtime

Conclusion: The Future of Agent-Native Crypto Compliance

As crypto integrates more deeply with automation, compliance intelligence must evolve beyond dashboards and subscription-based platforms. AI agents will increasingly read on-chain data, route funds, manage portfolios, and interact with smart contracts. To do so safely, they must understand who they are interacting with and what risks they inherit—the foundations of KYA and KYT.

Traditional APIs are not designed for autonomous software. X402 changes the paradigm by making compliance:

machine-payable
permissionless
stateless
pay-per-request

The live demo at x402.blocksec.ai showcases this new model—compliance endpoints wrapped in X402, backed by BlockSec’s MetaSleuth and Phalcon Compliance intelligence, accessible without accounts or API keys.

As AI agents become first-class participants in financial ecosystems, they will require native access to real-time, compliance-grade intelligence. X402 provides the missing bridge: a simple, internet-native way for agents to acquire risk data precisely when they need it.

Crypto compliance—long designed for humans—is becoming agent-native.

And this unlocks a new frontier for safer, more autonomous on-chain systems.