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What does AML mean?
AML (anti-money laundering) is the set of laws and checks meant to stop criminal money being passed through the financial system. In the US it rests on the Bank Secrecy Act, which requires financial institutions to keep records, identify customers and report suspicious activity to the government.
What it means for you
AML checks are why an exchange may ask where your money came from, delay a large withdrawal, or freeze an account linked to stolen funds. Coins that passed through an address tied to a hack or scam can be refused at a deposit. Keeping records of where your crypto came from makes these reviews shorter.
A common mistake: “The exchange checks my identity, so my money there is protected.”
In fact: AML and KYC rules exist to stop criminal money, not to protect your deposit. FINRA notes platforms registered only as money services businesses have AML duties, not investor-protection duties.
How it works
In the US the base is the Bank Secrecy Act of 1970, which requires financial institutions to keep records, identify people conducting transactions, and report cash transactions over 10,000 dollars. Later laws added layers: money laundering became a federal crime in 1986, suspicious activity reports were required from 1992, and the USA PATRIOT Act of 2001 strengthened customer identification and extended AML programs to all financial institutions. KYC is one part of AML: identifying the customer. FINRA notes some crypto platforms operate as money services businesses, whose obligations are anti-money laundering, not investor protection.
Sources: FinCEN: History of anti-money laundering laws, FinCEN: CDD Final Rule, FINRA: Crypto Assets · checked 4 October 2026
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Educational content, not financial advice. Written by hand and checked against the source named above. Something wrong? Tell us and we reply within two business days.