AML KYC

Definition ∞ AML KYC refers to anti-money laundering and know-your-customer regulations. These regulatory protocols mandate financial institutions, including cryptocurrency exchanges, to verify customer identities and monitor transactions. The objective is to detect and prevent illicit financial activities such as money laundering and terrorist financing. Compliance ensures market integrity and safeguards against the use of digital assets for criminal purposes.
Context ∞ The application of AML KYC within the digital asset space remains a central point of regulatory discussion globally. Jurisdictions are continuously refining these requirements for virtual asset service providers, impacting how platforms operate and user privacy considerations. Ongoing developments seek to balance regulatory oversight with the decentralized nature of many crypto systems.