What is KYC / AML?

Researched by Thomas DeMichele Published - December 11, 2018
Last Updated - March 26, 2020

KYC / AML stands for “Know Your Customer / Anti Money Laundering.” KYC and AML guidelines are followed by banks, insurers, broker-dealers, cryptocurrency exchanges, and other such entities.[1][2][3]

Specific KYC / AML rules can differ by country, but in general they require financial institutions know their customer and monitor and report on suspicious activity.

In the United States KYC / AML rules are pulled from an array of laws, rules, regulations, and guidelines including FINRA guidelines, sections of the Bank Secrecy Act, and sections of the USA PATRIOT Act.

In short, KYC / AML rules are why you have to prove your identity before using most crypto exchanges.

A more complete explanation of KYC / AML can be found at: AML/KYC Explained on BitcoinTalk.org.

Article Citations
  1. Anti-Money Laundering (AML) Source Tool for Broker-Dealers. SEC.gov.
  2. Suitability: What Investors Need to Know.  FINRA.org. (see other rules and resources on this page)
  3. AML/KYC Explained. BitcoinTalk.org.

Author: Thomas DeMichele

Thomas DeMichele has been working in the cryptocurrency information space since 2015 when CryptocurrencyFacts.com was created. He has contributed to MakerDAO, Alpha Bot (the number one crypto bot on Discord),...