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AML Regulations

Understanding Anti-Money Laundering regulations and compliance requirements

AML Objectives and Purpose

Prevent Money Laundering

Detect and prevent the process of making illegally obtained money appear legitimate

Combat Terrorist Financing

Identify and stop the funding of terrorist activities and organizations

Ensure Compliance

Meet regulatory requirements and avoid penalties for non-compliance

Protect Customers

Safeguard legitimate customers from financial crime and reputational damage

Why AML Matters in Crypto

Cryptocurrency's pseudonymous nature and global reach make it attractive for money laundering. AML regulations help ensure that digital assets are used for legitimate purposes and that financial institutions can identify and report suspicious activities.

Global AML Framework

FATF

Financial Action Task Force

International standard setter
Key Recommendations:

40 Recommendations on AML/CFT

Crypto Guidance:

Travel Rule, VASP regulations

FinCEN

Financial Crimes Enforcement Network

US financial intelligence unit
Key Recommendations:

BSA compliance, SAR filing

Crypto Guidance:

Virtual currency guidance, MSB requirements

EBA

European Banking Authority

EU banking regulator
Key Recommendations:

5AMLD implementation, risk assessment

Crypto Guidance:

Crypto-asset service provider guidelines

Core AML Requirements

Customer Due Diligence (CDD)

  • Identity verification of customers
  • Beneficial ownership identification
  • Purpose and nature of business relationship
  • Ongoing monitoring of transactions

Enhanced Due Diligence (EDD)

  • High-risk customer assessment
  • PEP (Politically Exposed Person) screening
  • Source of wealth verification
  • Increased monitoring frequency

Record Keeping

  • Transaction records for 5+ years
  • Customer identification documents
  • Compliance program documentation
  • Training and audit records

Reporting Obligations

  • Suspicious Activity Reports (SAR)
  • Currency Transaction Reports (CTR)
  • Regulatory notifications
  • Cross-border transaction reporting

Implementation Roadmap

1

Risk Assessment

Conduct comprehensive risk assessment of your business

Identify customer types
Assess product risks
Evaluate geographic risks
Document findings
2

Policy Development

Develop written AML policies and procedures

Create AML program
Define roles and responsibilities
Establish monitoring procedures
Document escalation processes
3

System Implementation

Implement technology solutions for compliance

Deploy monitoring systems
Integrate screening tools
Set up reporting mechanisms
Test system functionality
4

Training & Monitoring

Train staff and monitor ongoing compliance

Conduct staff training
Perform regular audits
Update procedures
Maintain documentation