What are the AML Regulations for Crypto?

The effect of Cryptocurrencies in Financial Crimes


Cryptocurrencies have recently entered our lives. Crypto exchanges quickly became important in financial systems. Most people wondered and researched these markets. Unfortunately, criminals also appeared here. Crypto exchanges became an important field of criminal activity. Since crypto exchanges and cryptocurrencies are a new market, too many system gaps have been detected. Criminals committed crimes using system gaps. The regulators realized this and took precautions. Criminals committed crimes such as bribery, money laundering, and terrorist financing through cryptocurrencies.


Why is AML compliance important for Crypto Exchanges?


As the adoption of cryptocurrencies continues, firms are getting serious about Anti-money laundering compliance. Authorities have fought associated with the AML risk crypto posed for years, but countries like Switzerland and Japan have adopted a considerable approach allowing for investment and trade, on the other hand, spectrum South Korea and China are opting for strict restrictions on mining and exchanges. Money laundering rules for crypto businesses have become a standard.



The unevenness of the cryptocurrency landscape has incentivized governments' efforts to develop a regulatory framework around the world. Financial Action Task Force (FATF) has answered this call and will release a has managed to set international AML standards in June 2019. Without government intervention, People stated that crypto businesses must encourage regulation to enhance the addressable market for adoption. 


What are the AML regulations for Crypto Exchanges?


At a state level, Asian regulators are likely to take progressive steps in the virtual asset regulation. While keeping an eye on the Monetary Authority of Singapore (MAS) ramped up their engagement with the sector in 2018. The EU's Fifth Anti-Money Laundering Directive (5 AMLD) sets forth the AML requirements for cryptocurrency exchanges operating in the member states, which they will have to comply with by 2020. All these news are suggesting that big moves are likely in the global cryptocurrency regulation will pump the industry to adopt new monitoring and compliance tools in a short period of time.


AML Compliance For Crypto Exchanges - Case Study


How do Crypto Exchanges ensure AML compliance?


The guidance of FATF provides crypto businesses with a clear framework on performing AML compliance, prepare to use this to inform your risk assessment and procedures. Even more, any changes you make to your compliance practices based on this guidance you still need to align any changes with the regulations of the jurisdiction that you operate in. FATF also guides financial institutions to comply with Know Your Customer (KYC) processes. Financial services can use the Customer Due Diligence (CDD) scanner to detect customer identification, especially for scanning high-risk customers.


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