Crypto Casino Verification: Modular KYC & AML System

Crypto Casino Player Verification System: Modular Architecture

Designing a verification system for a crypto casino requires balancing Web3 anonymity with regulatory demands. Crypto casinos face dual pressure: users value privacy, while licensing bodies and payment partners require KYC, AML, and age verification. Our approach is a modular tiered system that adapts to the license and region. Our team has over 8 years of experience in crypto compliance and has delivered 30+ turnkey KYC solutions for crypto projects, including casinos and exchanges.

How Tiered Verification Works — Building the Verification System

Not all players require the same level of scrutiny. A tiered approach is the standard for gambling:

Tier 0 (minimal): email, wallet connection, and automatic AML address screening via Chainalysis or Elliptic. No documents, instant response.

Tier 1 (basic): name, date of birth, country of residence. Automatic sanctions list check. Account confirmation via email or SMS.

Tier 2 (extended): government ID (passport, driver's license), liveness check, proof of address. We use Sumsub, Onfido, or equivalent.

Tier 3 (enhanced due diligence): Source of Funds, Source of Wealth, extended PEP/Sanctions check, manual review by a compliance officer.

Which AML Tools to Use?

For casinos, it is critical: funds from darknet markets or stolen funds — direct liability for the platform. Provider comparison:

According to Chainalysis KYT documentation, risk categories include darknet market, stolen funds, ransomware, sanctions. For such addresses — reject deposit and freeze account. Grey zone (gambling, P2P exchange, mixing) requires manual review. We additionally check wallet addresses against the OFAC SDN List via Chainalysis or our own parser — the list is updated daily.

Sumsub processes requests 3 times faster than manual verification, and Chainalysis KYT detects suspicious transactions with 95% higher accuracy than static OFAC screening. Our clients save up to 60% on verification costs compared to manual processes. A typical project starts at $20,000 and saves $30,000–$100,000 annually.

Chainalysis KYT (Know Your Transaction) Integration

async function screenAddress(address: string, asset: string): Promise<RiskScore> {
  const response = await chainalysisClient.post('/v1/users', {
    userId: address,
  });
  const transferResponse = await chainalysisClient.post('/v1/transfers', {
    network: asset,
    asset: asset,
    transferReference: address,
    direction: 'received',
  });
  return {
    riskScore: transferResponse.data.riskScore,
    cluster: transferResponse.data.cluster?.name,
    category: transferResponse.data.cluster?.category,
  };
}

How to Integrate a KYC Provider?

Sumsub — Standard Choice for Gambling

Sumsub provides WebSDK for an embedded flow. Token generation on the backend:

async function getSumsubToken(applicantId: string): Promise<string> {
  const timestamp = Math.floor(Date.now() / 1000);
  const method = 'POST';
  const url = `/resources/accessTokens?userId=${applicantId}&levelName=basic-kyc-level`;
  const signature = crypto
    .createHmac('sha256', SUMSUB_SECRET_KEY)
    .update(timestamp + method + url)
    .digest('hex');
  const response = await axios.post(
    `https://api.sumsub.com${url}`,
    {},
    {
      headers: {
        'X-App-Token': SUMSUB_APP_TOKEN,
        'X-App-Access-Sig': signature,
        'X-App-Access-Ts': timestamp,
      },
    }
  );
  return response.data.token;
}

// Frontend initialization
import SumsubWebSdk from "@sumsub/websdk";

const sdk = SumsubWebSdk.init(
  accessToken,
  () => refreshToken(),
  {
    lang: "en",
    onMessage: (type, payload) => {
      if (type === "idCheck.onApplicantStatusChanged") {
        if (payload.reviewResult?.reviewAnswer === "GREEN") {
          handleKYCApproved(payload.applicantId);
        }
      }
    },
    onError: (error) => console.error("Sumsub error:", error),
  }
);

sdk.launch("#sumsub-container");

An important point is verifying the webhook signature to avoid accepting fake callbacks:

function verifySumsubWebhook(req: Request): boolean {
  const signature = req.headers['x-payload-digest'];
  const secret = process.env.SUMSUB_WEBHOOK_SECRET;
  const expectedSignature = crypto
    .createHmac('sha256', secret)
    .update(req.rawBody)
    .digest('hex');
  return crypto.timingSafeEqual(
    Buffer.from(signature),
    Buffer.from(expectedSignature)
  );
}

async function handleSumsubWebhook(payload: SumsubWebhookPayload) {
  const { applicantId, reviewResult, type } = payload;
  if (type === "applicantReviewed") {
    if (reviewResult.reviewAnswer === "GREEN") {
      await db.updateUserKYCStatus(applicantId, "APPROVED", reviewResult.reviewRejectType);
      await updateUserTier(applicantId);
    } else if (reviewResult.reviewAnswer === "RED") {
      await db.updateUserKYCStatus(applicantId, "REJECTED", reviewResult.moderationComment);
      await notifyUser(applicantId, "kyc_rejected");
    }
  }
}

Age Verification Without Documents

For markets where documentary KYC is unacceptable, we use Yoti Age Verification. The user receives a signed age token; the casino only sees "over 18". AgeID (UK standard) follows a similar approach. Integration via OAuth 2.0: Yoti acts as identity provider.

Geo-blocking and IP Verification

KYC does not replace geo-blocking. Mandatory checks:

async function checkPlayerEligibility(ip: string, walletAddress: string): Promise<EligibilityResult> {
  const geoResult = await maxmindClient.country(ip);
  const country = geoResult.country.isoCode;
  if (BLOCKED_COUNTRIES.includes(country)) {
    return { allowed: false, reason: 'geo_blocked', country };
  }
  const ipRisk = await ipqualityscore.check(ip);
  if (ipRisk.vpn || ipRisk.proxy || ipRisk.tor) {
    return { allowed: false, reason: 'vpn_detected' };
  }
  return { allowed: true, country };
}

Blocked country lists are determined by the license: Curacao, Malta, Estonia — each with its own list of restricted jurisdictions.

Why Responsible Gambling is Necessary?

Licensed casinos must implement responsible gambling features:

• Self-exclusion (block from 1 day to permanent)
• Deposit limits (daily/weekly/monthly — decrease instantly, increase after cooling-off 24–72 hours)
• Reality check (notification of time and losses)
• Cooling-off period (temporary pause)

These measures not only comply with regulatory requirements but also reduce risks of negative user experience. Automating responsible gambling is a mandatory compliance element.

Process

1. Analysis: study license requirements and select providers.
2. Design: KYC/AML architecture, flow diagrams.
3. Integration: connect Sumsub, Chainalysis, MaxMind, Yoti.
4. Testing: regression and load tests.
5. Deployment and training of the compliance team.

Timelines

A full compliance system — 6–10 weeks. Automation savings reach 60% compared to manual verification. Cost is calculated individually based on the set of providers and integration complexity.

What's Included in the Work

• Architectural documentation
• Provider integration (Sumsub, Chainalysis, Yoti, MaxMind)
• Smart contract writing (if needed)
• Load testing
• Compliance team training
• Launch support

Get an estimate for your project — contact us. We will help select providers and optimize your budget. With 8+ years of experience and 30+ delivered projects, we guarantee a compliant and efficient KYC system. Order a turnkey verification system — discuss details with our engineers.