OFAC which manages US sanctions maintains a list of addresses that any entity complying with US regulations needs to block e.g. https://home.treasury.gov/policy

OFAC which manages US sanctions maintains a list of addresses that any entity complying with US regulations needs to block e.g. https://home.treasury.gov/policy-issues/financial-sanctions/recent-actions/20200916 https://home.treasury.gov/policy-issues/financial-sanctions/... Most exchanges also use a service like Chainalysis to help identify which addresses need to be blocked or are high risk and need additional due diligence.