AML
Anti-money laundering rules and processes aim to stop criminals from using financial systems, including crypto platforms, to hide or move illicit funds.
AML stands for anti-money laundering: the laws, controls, and monitoring practices designed to prevent money gained from crime from being disguised as legitimate. In crypto, AML typically applies to exchanges, brokers, custodians, payment providers, and other businesses that handle digital assets for customers. These firms may need to verify customer identities, screen sanctions lists, monitor transactions, keep records, and report suspicious activity to regulators.
AML matters because blockchains can move value across borders quickly, and criminals may try to use that speed to obscure the source or destination of funds. A practical example is a crypto exchange asking for identity documents before allowing large withdrawals, then flagging deposits linked to a known ransomware wallet. AML is closely related to KYC, or “know your customer,” but KYC is mainly the identity-checking part, while AML is the broader system for detecting and reducing financial crime risk.
Other terms in Regulation & Tax
BitLicense
A state license required for many virtual currency businesses that serve customers in New York.
CARF
CARF is an OECD framework for tax reporting and automatic exchange of information about crypto-asset transactions.
Crypto Tax Loss Harvesting
A tax strategy where investors sell crypto at a loss to realize a capital loss that may offset taxable gains, subject to local rules.
FATF
The Financial Action Task Force is a global standard-setter for anti-money-laundering and counter-terrorist-financing rules.