AML (anti-money laundering)

Anti-money laundering (AML) refers to the laws, rules and procedures that aim to stop criminals from disguising the origin of illegal money. For crypto businesses, AML obligations typically include verifying customer identities (KYC), screening against sanctions lists, monitoring transactions for suspicious patterns, keeping records and reporting suspicious activity to authorities.

Exchanges also use blockchain analytics tools from firms such as Chainalysis, Elliptic and TRM Labs to trace where deposits came from. Coins linked to hacks, darknet markets, scams or sanctioned mixers can be flagged, and the exchange may freeze an account or ask for an explanation of the source of funds.

AML rules are why exchanges sometimes ask detailed questions about large deposits, delay withdrawals or close accounts. If you receive crypto from P2P trades or unknown sources, you may unknowingly receive "tainted" funds that lead to a frozen account. Keep records of where your crypto came from.