AML (Anti-Money Laundering)
Quick Answer
Anti-money laundering (AML) refers to laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income through crypto payment systems.
Full Definition
Anti-money laundering refers to the set of laws, regulations, and procedures designed to prevent criminals from disguising illegally obtained funds as legitimate income. In crypto payments, AML compliance requires transaction monitoring, suspicious activity reporting, sanctions screening, and blockchain analytics. Payment providers implement AML controls including wallet screening, transaction velocity checks, and risk scoring to detect illicit activity. AML is a core requirement for any business processing crypto payments and is enforced globally by regulators including FinCEN, FCA, and FATF member jurisdictions.
Related Terms
Account Abstraction
Account abstraction is a blockchain upgrade that allows smart contracts to act as user accounts, enabling gasless transactions and simplified checkout without requiring customers to hold native gas tokens.
Address
A blockchain address is a unique alphanumeric identifier representing a destination for sending or receiving cryptocurrency on a specific network.
Airdrop
An airdrop is the distribution of free cryptocurrency tokens to wallet addresses, typically used for marketing, community building, or rewarding early adopters.
API (Application Programming Interface)
An API is a set of protocols that allows software applications to communicate. In crypto payments, a payment API lets merchants create payment requests, check transaction status, and receive webhook notifications programmatically.
Atomic Swap
An atomic swap is a peer-to-peer exchange of one cryptocurrency for another without a centralised intermediary, using hash time-locked contracts to ensure trustless execution.