Address screening is another name for wallet screening: checking a blockchain address against sanctions lists and risk data before sending funds to it or accepting funds from it. Exchanges, custodians, stablecoin issuers and payment companies that settle in digital assets run the check on deposits and withdrawals, usually through a blockchain analytics provider.
The word "address" is the more precise of the two. A wallet is a piece of software or a service that may control many addresses, while the thing actually examined is a single wallet address and the history of transactions linked to it. Screening looks for a direct match with an address named by a sanctions authority such as OFAC, and for indirect exposure, meaning funds that have passed through addresses tied to theft, darknet markets, mixers or sanctioned entities.
In payments outside crypto, the same phrase can also mean checking a customer's postal address against lists of sanctioned countries and regions as part of sanctions screening. The main entry covers how risk scores are produced, how firms set thresholds, and the limits of the technique.