A set of rules that financial companies must follow to stop criminals from using their services to hide illegal money.
AML (Anti-Money Laundering) is a set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income.
While blockchain technology is transparent, criminals can use a variety of methods to obscure the source of their funds. As the crypto industry has grown, governments and regulators have become increasingly focused on applying anti-money laundering regulations to digital assets.
For VASPs like centralized exchanges, AML compliance is a legal requirement. These firms are required to implement robust procedures to monitor customer activity for suspicious behavior. This includes a KYC process to verify the identity of their users. The goal is to create an audit trail for funds, making it difficult for criminals to use crypto for illicit activities.
For the average user, AML measures are a key part of the regulatory framework that makes centralized crypto services safe and compliant with global financial standards. While some in the crypto community believe these regulations run counter to the core idea of decentralization and anonymity, proponents argue they are necessary to bring crypto into the mainstream and ensure its long-term viability. By preventing illegal activity, AML helps to build trust in the crypto ecosystem and reduces the risk of fraud.
A government body that creates rules for financial activities. In Taiwan, this is the Financial Supervisory Commission (FSC).
Stands for "Virtual Asset Service Provider." It's the official term for companies that provide crypto services, like exchanges.
A document that explains the purpose, technology, and plan for a new crypto project.
