Anti Money Laundering (AML)

Anti-Money Laundering (AML) is a legal framework and regulatory procedures to prevent the illegal movement of money worldwide. Money laundering is the process of concealing the origins of (illegally obtained) cash by passing it through a usually complex sequence of transfers and transactions. These transactions are generally legitimate and would not be flagged, which then allows the original owner to use the illegitimate funds without any consequence.

AML targets criminal activities like trading in illegal goods (drugs, contraband, etc.), public office corruption and tax evasion, to name a few. Financial institutions such as Banks play a significant role in AML as they are required to monitor customers’ activities and deposit records, especially large transactions.

Cryptocurrencies represent a new challenge in AML and regulators are rushing to try to expand AML checks to crypto exchanges. EU and the US are leading in implementing KYC and AML in crypto exchanges.