AML
ComplianceAnti-Money Laundering (AML) is the broader framework of laws and procedures — of which KYC is one part — that prevents criminal proceeds from being disguised as legitimate funds.
AML encompasses the laws, regulations, and procedures that require financial institutions — and, under FATF standards, crypto VASPs — to detect, prevent, and report money laundering and terrorist financing. Its pillars are customer due diligence (KYC), ongoing transaction monitoring, recordkeeping, and suspicious-activity reporting.
The Financial Action Task Force sets the global standard through its 40 Recommendations. Recommendation 15 extends AML/CFT duties to VASPs (exchanges, custodians), and Recommendation 16 — the "Travel Rule" — requires them to collect and pass on originator and beneficiary information for crypto transfers.
Implementation is uneven: FATF's 2025 targeted update found only about 40 of 138 assessed jurisdictions largely compliant with its virtual-asset standard (Recommendation 15), and just one fully compliant (unchanged from 2024), so global AML enforcement for crypto is still maturing even though the standard itself is well established.
Crypto Relevance
AML compliance — including Travel Rule data-sharing between exchanges — is a prerequisite for platforms to legally list ISO 20022-aligned assets and move funds between institutional counterparties without compliance holds.
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Join ISO 20022 investorsRelated Terms
KYC
Know Your Customer (KYC) is the identity-verification process financial institutions and crypto exchanges must complete before letting a customer open an account or transact.
FATF Travel Rule
The FATF Travel Rule requires that originator and beneficiary information must travel with crypto transfers above $1,000, structured in ISO 20022-compatible format.
LEI
LEI (Legal Entity Identifier) is the 20-character ISO 17442 code that uniquely identifies legal entities in financial transactions, mandatory in most ISO 20022 messages.
Related Tools
Sources
- FATF — Targeted Update on Virtual Assets & VASPs (2025)
- FATF — Risk-Based Approach Guidance for Virtual Assets
Last reviewed: 2026-07-01