Risk Management

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AML Controls

Madhouse Wallet operates a risk-based AML program. All transfers are subject to:

• Sanctions screening — UN, EU, and UK consolidated lists checked on every transfer

• Transaction monitoring — behavioral anomaly detection and threshold alerts (>$10,000)

• Recipient verification — ownership of recipient accounts is enforced via our internal records; a recipient cannot be used by a different account

• Ongoing screening — elevated-risk accounts are rescreened quarterly

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Risk Tiers

Level	Criteria	Review Cadence
Low	Standard business profile, transactions under $10K/month	Every 5 years
Medium	Transactions over $10K/month, cross-border	Every 2–3 years
High	PEPs, high-risk geographies, complex ownership	Annual

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Suspicious Activity

Madhouse Wallet files Suspicious Activity Reports (SARs) within 7 working days of detection. Red flags include:

• Refusal to provide source of funds

• Transfers to conflict zones or sanctioned states

• High-volume transactions structured below reporting thresholds

• Recipients that cannot be independently verified

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Transaction Failure Policy

Transfers that fail compliance review are placed in a hold state (maximum 72 hours) for manual review. Madhouse Wallet does not hard-fail transactions for compliance reasons — only delays while review is conducted.

The 98% off-ramp success rate reflects that the vast majority of transfers complete without intervention.

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Partner Obligations

See Partner Responsibilities for details on what your integration must handle, including end-user KYC and local reporting requirements.