KYC AML

Definition ∞ KYC AML refers to the regulatory processes of Know Your Customer (KYC) and Anti-Money Laundering (AML). These procedures require financial institutions and virtual asset service providers to verify the identity of their clients and monitor transactions for suspicious activity. Their objective is to prevent financial crimes, including money laundering and terrorist financing.
Context ∞ The application of KYC AML regulations to the cryptocurrency sector remains a central point of discussion among regulators and industry participants. Current debates focus on the implementation of these requirements for decentralized exchanges and DeFi protocols, alongside the challenges of global regulatory harmonization and the potential impact on user privacy.