AML (Anti-Money Laundering)

AML is not a technology but a regulatory and compliance framework. It is usually cited alongside CFT (counter-terrorism financing) and CPF (counter-proliferation financing), the AML/CFT/CPF block. Its operational pillars are the risk-based approach, customer due diligence (CDD) and enhanced due diligence (EDD) for high-risk profiles such as politically exposed persons. Customer identification and verification is the KYC step. To this it adds transaction monitoring, suspicious activity reporting to the Financial Intelligence Unit (FinCEN in the US, SEPBLAC in Spain) and sanctions screening.

AML compliance is a legal requirement to operate as a financial institution or a crypto-asset service provider. In the European Union, the AML package adopted in 2024 sets this framework across three instruments: Regulation (EU) 2024/1624 (AMLR), the single rulebook applicable from 10 July 2027; Regulation (EU) 2024/1620, which creates the AMLA authority headquartered in Frankfurt and operational since 1 July 2025; and Directive (EU) 2024/1640 on cooperation between Financial Intelligence Units. The global standard is set by FATF through its 40 Recommendations.

For tokenization, AML is the compliance layer that lets real-world assets and stablecoins circulate on-chain within the regulated perimeter. Circle, the issuer of USDC, operates under AML and KYC programs. Platforms such as Securitize and Tokeny embed these controls into the ERC-3643 token standard, which only permits transfers between verified wallets. In this way, anti-money-laundering obligations are encoded into the digital asset itself.