AML Check: Why It Is Necessary and How It Differs from CFT and KYC
When using cryptocurrency services – such as exchanges, wallets, and payment platforms – users often encounter requirements to pass security procedures. One such measure is the AML check, and failure to comply may result in account or transaction blocking.
This article explores what an AML check is, why it is needed, how it is conducted, and how to verify the legality of cryptocurrency to minimize risks.
What is an AML check?
AML stands for Anti-Money Laundering – a set of procedures and tools aimed at combating money laundering from criminal activities. These checks are used both by traditional financial institutions for fiat and cryptocurrency platforms.
The core principle of AML is collecting, storing, and analyzing information about clients and their activities. One key element of this systеm is the KYC (Know Your Customer) procedure, which requires identity verification. Additionally, AML includes transaction monitoring, detection of suspicious activity, and asset freezing for in-depth analysis when needed.
AML systems record all information about transactions and wallet owners, which can be used for internal control or cooperation with law enforcement. This improves transparency and builds trust with users and regulators.
The specific checks vary by jurisdiction – each country sets its own rules. Many crypto platforms must cooperate with regulators in the countries where they are registered and carry out both internal and external monitoring.
New Challenges and Global AML Trends in the Crypto Space
According to recent analytical reports, global approaches to AML in crypto are constantly evolving. More countries and organizations, especially FATF (Financial Action Task Force), are imposing strict requirements on digital asset operations.
Today, AML checks are an integral part of legal operations in the crypto industry. This is especially relevant for USDT and other stablecoin transactions, as these assets are often used in laundering schemes.
The Difference Between AML, KYC, CFT, and KYT
Crypto services implement different levels of checks:
KYC (Know Your Customer) – the initial step to identify a user. The client must provide documents proving identity and address. Sometimes video interviews are required.
AML (Anti-Money Laundering) – a broader systеm that includes KYC but also analyzes transactional behavior, user actions, and interactions with other network participants.
CFT (Counter-Terrorist Financing) – focuses on detecting and preventing terrorist financing. Platforms monitor connections with suspicious organizations and investigate matches.
KYT (Know Your Transaction) – analyzes not the person, but the funds’ movements: origin, route, and nature of each transaction. This helps detect suspicious activity, even in seemingly “clean” accounts.
Why Is Cryptocurrency Screening Important?
Anonymity is a core feature of cryptocurrencies, but it also makes them attractive to criminals. Blockchain enables transactions without identity disclosure, often exploited for tax evasion, laundering, or financing illegal groups.
Another threat is regulatory uncertainty. In many countries, crypto laws are absent or under development, creating a “gray” zone where fraud thrives.
Exchange and P2P platforms are particularly vulnerable: users may unknowingly buy crypto involved in illegal schemes, with no way to trace its origin. To reduce risks, major exchanges now implement AML checks at registration and during platform use.
Why Do Exchanges Need AML Procedures?
Legal compliance. In many countries, AML and KYC are mandatory. Violations can lead to fines or bans.
Law enforcement cooperation. Exchanges must provide transaction histories and user data during investigations if there are legal grounds.
Client safety. AML protects users from scams and accidental dealings with illegal assets.
Reputation. Companies with strong AML measures inspire trust from clients, partners, and regulators.
How Risk Scores and AML Reports Work
Transaction analysis services assign a Risk Score to wallets – a rating indicating the risk level. The scale usually ranges from 0 to 100. Factors inсlude:
- Links to darknet markets, mixers, illegal exchangers;
- Incoming funds from flagged addresses;
- Transaction frequency, volume, and patterns.
Based on this data, AML tools generate reports suitable for internal audits or regulatory disputes.
Top AML Check Services
You can verify wallet “cleanliness” using these tools:
Lukka – instant transaction risk assessment;
AMLBot – popular Telegram bot for address or hash checks;
Crystal Blockchain and Chainalysis – professional tools for transaction tracing and crypto flow monitoring.
How Is Crypto Laundering Done?
Main methods inсlude:
Mixers – platforms that scramble crypto to break traceability. Banned in some countries.
Intermediate wallets – long chains of transfers via fake accounts and “drops.”
Exchangers without KYC/KYT – maintain anonymity but pose high risk.
Smart contracts and collateral schemes – convert suspicious coins into “clean” ones.
Self-purchase of NFTs – attackers mint NFTs and buy them from themselves to simulate legal revenue.
How to Protect Yourself From “Dirty” Crypto
- Use verified exchanges and exchangers with KYC;
- Check counterparties’ addresses via AML tools;
- Regularly change your wallet address;
- Avoid using your main wallet for unknown deals;
- Store evidence of your funds’ origin.
Platform Solutions: Example of Crystal-trade
Many crypto payment services offer built-in AML. One of them is Crystal-trade – a crypto acquiring solution for online businesses. Features inсlude:
- Support for popular cryptocurrencies;
- User-friendly interface;
- Free setup and integration;
- AML monitoring of all incoming transactions.
To activate, simply enable the option in your dashboard. The minimum fee is 0.4%.
Conclusion
AML checks are an essential part of the modern crypto world. They protect users, ensure legal compliance, and guarantee secure operations. Platforms with built-in AML like Crystal-trade reduce risks and make crypto use safer for businesses and individuals alike.