As the digital asset industry scales, maintaining robust crypto payment compliance has become essential for any platform handling deposits and withdrawals. Interlace, a global crypto payment provider, implemented BlockSec’s blockchain compliance solution, Phalcon Compliance, to streamline risk reviews, reduce exposure to illicit funds, and safeguard its ecosystem. 
Industry Landscape & Future Trends
Current Status
The U-card sector is expanding quickly, but high churn among service providers reveals a volatile landscape. Many crypto platforms are launching U-card programs, yet reliance on upstream partners and increasing regulatory pressure contribute to high attrition rates.
The value chain includes multiple interdependent stakeholders across compliance, clearing, card manufacturing, payment network integration, risk control, and fiat–crypto conversion—making real-time compliance management critical.
Opportunities remain strong, particularly for projects combining yield products with on-chain asset usage to enhance user retention and create new value.
However, risks persist: FX exposure, complex taxation, strict AML/CFT requirements, and increasing fraud-related compliance obligations.
Growth Drivers & Pain Points
Key Drivers
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Rising Web3 demand for frictionless payments positions U-cards as a vital bridge between digital assets and real-world use.
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Exchanges and Web3 projects can accelerate adoption through ecosystem synergies and user network effects.
Major Challenges
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Limited availability of stable and reliable issuing partners makes scaling difficult.
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Fragmented global regulations require continuous investment in blockchain compliance and risk control.
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Short-term incentives are insufficient to build sustainable, long-term user value.
About Interlace
Founded in 2019, Interlace powers stablecoin cross-border payments for global businesses and Web3 institutions. The platform offers open APIs for embedded finance and serves industries such as e-commerce, gaming, advertising agencies, and B2B trade.
Interlace adheres to global regulatory standards and holds the highest card-payment security certification: PCI-DSS Level 1. It is also licensed in the United States, Hong Kong SAR, and Lithuania.
Compliance Challenges Before BlockSec
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Complex inbound flows – Large volumes of deposits often come from risky sources (mixers, hacked protocols, darknet markets, sanctioned addresses). Manual reviews are slow, unreliable, and not real-time.
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Uncertain outbound flows – Hard to detect if withdrawal addresses belong to hackers, phishing wallets, or OFAC-sanctioned entities, creating compliance and reputation risks.
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Balancing control and user experience – Strict rules harm good users and block growth, while loose rules are ineffective. Precise and tiered risk management is needed.
How BlockSec Strengthened Interlace’s Crypto Payment Compliance
Deposit Risk Management
Counterparty Screening with KYA/KYT
Leveraging KYA (Know Your Address) and KYT (Know Your Transaction), Phalcon Compliance can help Interlace:
Identify counterparties and fund sources in real time.
Analyze address history, fund flows, and tagging data to pinpoint high-risk funds with accuracy.
Results:
Review efficiency improved by 70%, freeing compliance teams from repetitive checks.
Tiered Risk Handling
High/Severe Risk: Deposits are restricted; customers must provide proof of fund origin. Funds may be returned or frozen for 7–30 days per regulatory requirements.
Medium Risk Funds: Subject to periodic retrospective checks with dynamic reassessment.
Results:
Many attempted deposits from mixers and stolen funds were successfully intercepted.
Withdrawal Risk Management
High-Risk Address Blocking
Withdrawals to addresses flagged as severe or high risk are blocked outright.
Results:
Achieved a 99.9% interception rate for high-risk withdrawals, cutting off illicit fund flows at the source.
Dynamic Monitoring & On-Chain Tracing
Continuous updates ensure withdrawal addresses stay aligned with evolving risk lists, supported by real-time on-chain tracing.
Results:
Achieved zero security incidents, with platform funds safeguarded at industry-leading compliance levels.
Real-Time Risk Interception
Suspicious outbound transactions are automatically intercepted before execution.
Results:
Improved transparency and reduced exposure to money laundering and illicit activities.
User-Centric Risk Controls
BlockSec’s blockchain compliance solution ensures:
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Granular risk scoring and tiered handling instead of one-size-fits-all.
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Millisecond-level checks for regular users, ensuring smooth UX.
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Targeted stops only for high-risk transactions.
Results:
Interlace boosted compliance while keeping high user satisfaction and retention—supporting long-term growth.
Client Testimonial
Partnering with BlockSec has significantly strengthened the security of our platform. Real-time deposit and withdrawal risk management has prevented numerous high-risk transactions. BlockSec’s solution not only improved our compliance capabilities but also preserved user experience—critical for our long-term growth.
— Romy, Interlace CPO
Q&A
Q1: How do we integrate KYA/KYT into our system?
Use RESTful APIs at deposit and withdrawal points for real-time risk checks. Integration typically completes within days.
Q2: How many blockchain addresses does BlockSec cover?
400M+ labeled addresses, updated 24/7 through monitoring, AI algorithms, and expert review.
Q3: Does Phalcon Compliance meet global regulatory standards?
Yes. It aligns with FATF AML/CFT standards and supports audit logs, STR reporting, and customizable compliance templates.
Ready to Strengthen Your Crypto Payment Compliance?
BlockSec helps exchanges, payment providers, financial institutions, and Web3 platforms automate risk detection, prevent high-risk transactions, and stay fully compliant—without hurting user experience.
👉 Book a free demo of Phalcon Compliance
👉 Get a real-time risk assessment for your platform
👉 See how KYA/KYT automation can reduce your compliance workload by 70%
Start building a safer, more compliant crypto business today.
