What Is AML?
AML, anti-money laundering, is the legal duty on financial businesses to know who their customers are, watch for suspicious activity, and report it. In crypto that duty sits on exchanges, on-ramps, and many card issuers. It is why you uploaded a license, why a withdrawal asked extra questions, and why an account can freeze without a human you can argue with on the first call.
How It Actually Works
- KYC is the identity piece. Transaction monitoring is the ongoing piece. The Travel Rule is the "send the name along with the coins" piece between companies.
- FinCEN is the U.S. hub. The Bank Secrecy Act is the statute. My regulator guide places them on the map next to the SEC and CFTC.
- Self-custody does not erase AML. It moves you off the exchange's dashboard. The moment you cash out at a regulated door, the history can still matter.
Risks and Common Mistakes
- Lying on KYC or using someone else's account. That is how people turn a paperwork problem into a criminal one.
- Mixing coins with a mixer and then depositing to Coinbase as if nobody would notice. They notice.
- Treating a freeze as proof you did something wrong. False positives happen. Slow, documented appeals work better than threats and new accounts.
When It Matters
Every exchange account, every card application, and any business that touches customer crypto. Ordinary users: tell the truth, keep records, withdraw to your own keys on a schedule.
Related Terms
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